Valmet

Valmet Corporation
Julkinen osakeyhtiö
Traded as Nasdaq Helsinki: VALMT
Industry Services, Pulp and Energy, Paper and Automation
Founded 2013
Headquarters Espoo, Finland
Key people
 Bo Risberg (Chairman), Pasi Laine (President and CEO)
Revenue €2.928 billion (2015)[1]
€120 million (2015)[1]
Profit €78 million (2015)[1]
Total assets €2.894 billion (end 2015)[1]
Total equity €855 million (end 2015)[1]
Number of employees
 12,306 (end 2015)[1]
Website www.valmet.com

The Valmet Corporation is a Finnish company and a developer and supplier of technologies, automation systems and services for the pulp, paper and energy industries. Valmet’s history as an industrial operator stretches back over 200 years. Formerly owned by the State of Finland, Valmet was reborn in December 2013 with the demerger of the pulp, paper and power businesses from Metso Corporation. Valmet is organized around four business lines: Services, Pulp and Energy, Paper, and Automation. Valmet's services include maintenance outsourcing, mill and power plant improvements and spare parts. The company provides technology for pulp, tissue, board and paper mills and bioenergy plants. In the area of automation, Valmet's solutions range from single measurements to mill wide turnkey automation projects. Valmet's operations are divided into five geographical areas: North America, South America, EMEA, China, and Asia-Pacific. Valmet has operations in approximately 30 countries and it employs 12,000 people. Its headquarters are located in Espoo, and it is listed on the Nasdaq Helsinki. In 2015, Valmet's net sales totaled EUR 2.9 billion.[2][3]

Organization and products

Valmet has four business lines – Services, Automation, Pulp and Energy, and Paper.[3][4]

Services

Valmet's Services business line carries out mill improvements and upgrades and offers paper machine roll and clothing services, filter fabrics, spare parts and life cycle services. Services' customers mostly operate in the fields of pulp, paper, and energy production. More than 2,000 of the world's 3,800 pulp and paper mills are Valmet's customers. The business line aims to improve the reliability, cost efficiency, capacity and quality of its customers' operations by offering solutions to reduce emissions, enhance the safety of operations, and use energy, water and raw materials more efficiently. Valmet has a global network of 70 service centers. The most important market areas of the Services business line are EMEA and North America.[3][5]

Automation

Valmet's Automation business line provides automation solutions that range from single measurements to mill wide turnkey automation projects. Its main products include analyzers and measuring devices, automation systems, vision systems, quality control systems and performance and service solutions. The main customer groups are the pulp and paper industry, other process industries, energy companies, the marine industry and the oil and gas industries. More than 1,000 power plants use Valmet's process automation solutions. The unit aims to improve its customers' profitability by enhancing their production operations and improving their energy, material and cost efficiency.[3][6]

Pulp and Energy

Valmet's Pulp and Energy business line provides technologies and solutions for pulp and energy production as well as biomass conversion. The business line's products can be divided into three main categories.[3][7]

Pulp production

Pulp mill projects range from the delivery of individual machines and equipment to the supply of complete production lines. Pulp is used to produce different types of paper, including board, tissue and printing paper. It is also used in viscose and hygiene products. Valmet's pulp business customers include mechanical and chemical pulp producers as well as companies in the panelboard industry. In recent years, new customers have been acquired particularly in South America and Asia. Many different machines are required for the various phases of the pulp production process. Valmet supplies technology for all these phases.[3][7]

Energy production

Valmet supports its customers' energy solutions by supplying and upgrading boiler plants for the combustion of biomass, fluidized bed boilers that use biomass, coal, recycled materials and sorted waste as fuel, and oil- and gas-fired boilers. Valmet also provides complete heat and power generation systems and power plants, as well as environmental protection systems to control the quality of air. The business line's customers include municipalities, utilities, and companies in the energy, process, pulp and paper industries. The main market areas are the Nordic countries and EMEA.[3][7]

Biomass conversion technologies

Valmet anticipates the increased importance of biomass as a raw material in many industries. Biomass can be used to produce renewable energy and recyclable products such as paper, pulp, board and tissue paper. To prepare for this, Valmet has developed new technologies to enhance the utilization of biomass. Such technologies include the lignin recovery technology LignoBoost, pyrolysis technology to produce renewable bio-oil, and indirect biomass gasification that converts biomass into biomethane, which can be used as a replacement for natural gas.[3][7]

Paper

The customers of Valmet's Paper business line operate in the board, tissue and paper industries. Valmet supplies its customers with machines and equipment and carries out machine rebuilds. The customers of the Paper business line manufacture board, tissue and paper, and process them into packaging, tissues, disposable towels, toilet paper, and writing and printing paper. Customers for new board and paper machines are mostly located in China and Asia-Pacific, while rebuilds are often delivered to Europe and North America.[3][8]

Locations

Valmet operates in some 30 countries and employs 12,000 people. Valmet's primary production sites are the Rautpohja factory in Jyväskylä, Finland, and the units in Sweden's Karlstad and Sundsvall and China's Xian and Shanghai. Rautpohja is the center of paper and board machine engineering operations, the manufacture of key components such as headboxes and the most important rolls, and the assembly of machine deliveries to Europe.[2][9]

Partners

Valmet makes three types of purchases. It procures motors and bearings directly from commercial manufacturers. Parts designed by Valmet are also manufactured at partner mills. Project procurement includes supplies sent directly to the installation sites. Valmet makes purchases from sources that are as local as possible. For example, the Rautpohja factory area is also the home of the Rautpohjan Konepaja engineering workshop, which manufactures steel structures for Valmet and other operators. Purchases are mostly made by the procurement organization, which consists of a global team of 100 employees. The total annual value of Valmet's external purchases is EUR 1.4 billion, of which EUR 500 million is spent in Finland.[9]

History

Roots in the 18th century

The company's history goes back to the 1750s when a small shipyard was established in the Sveaborg fortress (now called Suomenlinna) on the islands outside Helsinki. In the early 20th century it ended up under the ownership of the Finnish state and became part of Valmet. Tamfelt was established in 1797 and became one of the leading suppliers of technical textiles. These operations are now part of Valmet's Services business line.

Several of the companies forming part of the new Valmet Corporation that was born is 2010's date back to the 19th century. The Karlstad Mekaniska Werkstad (KMW) in Sweden began in 1865. Beloit Corporation began in 1858 as a foundry in the city of Beloit, Wisconsin, US. Sunds Bruk, the predecessor of Sunds Defibrator Industries Ab, was established in Sweden in 1868.

Creation of Valmet after World War II

Valmet's roots were born in 1944 when state-owned military supply factories, previously controlled by the Finnish Ministry of Defence, were moved under the Ministry of Trade and Industry. This was done because the Moscow Armistice strongly limited the number of Finnish military personnel, and it was feared that the Soviet Union might want to include the workforce of the arms industry in these calculations. The Parliament of Finland acted rapidly to make the decision.

In 1946, several metal workshops owned by the Finnish state were merged to form the Valtion Metallitehtaat (English: State Metalworks), abbreviated as ValMet. The new company came to include various metalworks that manufactured war reparation products for the Soviet Union in different parts of Finland. In the year of its establishment, the company had some 6,200 employees.[10]

At the beginning of 1951, the Valtion Metallitehtaat group was renamed Valmet Oy. The various factories, which had previously manufactured warships, aircraft and artillery pieces, spent years finding their new purposes. The conversion of an artillery works into a paper machine manufacturer was a success, but import restrictions created serious obstacles in its route to Western markets. The company's shipyard operations were often –and unfavorably – compared to those of Wärtsilä. The airplane industry was maintained to strengthen national security, but it was not profitable. The branch did, however, make a solid contribution to Valmet's product development and designed, among other things, the straddle carrier used in harbors and manufactured as part of Finland’s war reparations. For decades, the entire conglomerate searched for new fields, such as the manufacture of cars or instrumentation. Modern quality control of production operations entered the Finnish manufacturing industry via Valmet's operations, for example in its car factories. National politics strongly influenced the management and decision-making in the company.

Valmet began manufacturing paper machines at the former Rautpohja artillery works in Jyväskylä, Finland in the early 1950s and delivered its first paper machine in 1953. Valmet became an paper machine supplier of international importance in the mid-1960s, when it delivered several machines to the world's leading paper industry countries.

In 1961, Valmet had 8,841 employees.[10]

1980s: privatization of the state corporation

Valmet had shipyards in Turku and Helsinki (first in the Katajanokka district, later in Vuosaari). In 1986, Valmet sold its shipbuilding operations to Wärtsilä Oy, which merged them with its own shipyards to form Wärtsilä Marine. The company was declared bankrupt in 1989. The operations continued under the names of Masa Yards Oy, Kvaerner Masa-Yards Oy, Aker Yards Oy, Aker Finnyards Oy, STX Finland Oy and currently as Meyer Turku Oy.

In connection with the shipyard transaction, Valmet bought from Wärtsilä a paper finishing machinery unit located in Järvenpää, Finland. Together with Valmet's own paper machine manufacturing units, the Järvenpää unit formed Valmet Paperikoneet Oy, which then purchased Tampella's board machine manufacturing operations in 1992.

In 1986, Valmet's gun manufacturing unit in Jyväskylä was transferred under Sako-Valmet Oy, which was later renamed Sako Oy. The company is currently owned by the Italian gun manufacturer Beretta.

Valmet sold its tractor, forest machine and transportation vehicle manufacturing operations to Sisu Auto in 1994. In 1997, Sisu Auto was sold to Partek. In 2002, Kone Corporation bought Partek, and in 2004 it sold Sisu to Suomen Autoteollisuus Oy, formed by a group of Finnish private investors and the company management.

In 1988, Valmet had 17,405 employees.[10]

Valmet and Rauma merge as Metso

In July 1999, Valmet Corporation and Rauma Corporation ("Rauma") merged to form a new company. Initially called Valmet-Rauma Corporation, the name was changed to Metso Corporation in August 1999. At the time of the merger Valmet was a paper and board machine supplier, while Rauma focused on fiber technology, rock crushing and flow control solutions. The merger produced an equipment supplier serving the global process industry. Shares in Metso were listed on the Helsinki Stock Exchange, which replaced the listings of its predecessor companies.

In 2000 Metso acquired Beloit Corporation's tissue and paper-making technology as well as its service operations in the United States and France. In December 2006, Metso completed the acquisition of the Pulping and Power businesses from Norwegian Aker Kvaerner ASA. The acquisition aimed to further improve the company's ability to serve the pulp and paper industries as a turnkey delivery partner, and to respond to the business opportunities created by power generation and biomass technologies. At the end of 2009, Metso acquired Tamfelt Corporation, one of the world’s leading suppliers of technical textiles.

Valmet reborn

On October 1, 2013, an extraordinary general meeting of Metso made the decision to split Metso into two companies: Valmet and Metso. After the demerger on December 31, 2013, the pulp, paper and power businesses of Metso formed the new Valmet Corporation, while the mining and construction and automation businesses remained with Metso.

Jukka Viinanen was chosen as the chairman of Valmet's board of directors. Viinanen had served as a member of Metso's board from 2008 to 2013, and as the chairman since 2009.[11]

In April 2015, Valmet introduced a new business – automation systems – alongside its existing pulp, paper machine and boiler businesses. Valmet completed a EUR 340 million transaction with Metso to purchase its process automation system and service unit (PAS). Approximately 80 percent of the unit's customers already did business with Valmet. With the transaction, Valmet hoped to be able to offer even more comprehensive product and service packages. The acquisition will allow Valmet to steadily increase the business volumes, improving profitability. At the time of the transaction, the PAS unit employed 1,600 people. Its net sales totaled EUR 300 million in 2013.[12][13]

In July 2015, Valmet announced the acquisition of Massimiliano Corsini's tissue paper rewinding business. The net sales of the 33-employee unit in Pescia, Italy, has remained steady at EUR 10 million in recent years.[14]

In March 2015, Bo Risberg from Sweden replaced Jukka Viinanen as the chairman of Valmet's board of directors. Previously, Risberg had held a high position at ABB and the position of managing director at the construction supply company Hilti. He also holds positions of trust at Piab Holding, Grundfos Holding and Trelleborg, among others. The Members of the board are vice chairman Mikael von Frenckell, Lone Fønss Schrøder, Friederike Helfer, Pekka Lundmark, Erkki Pehu-Lehtonen and Rogerio Ziviani. Pekka Lundmark later resigned from the board after being nominated CEO of Fortum Corporation.[11][15]

Research and development

Valmet has a long history as an innovator in the pulp, paper and energy generation fields. At the moment, Valmet's research and development efforts focus on cost-effective, modular and standardized solutions to secure the efficient use of energy, water and raw materials and to reduce customers' total costs. Biomass conversion technologies form another area of focus. Valmet has a portfolio of intellectual property that includes around 1,800 innovations. The research and development work mostly takes place within the company's Finnish and Swedish operations. A large part of the work is, however, carried out in close cooperation with customers, research institutes and universities.[16]

HR Policy

Starting from 2015, Valmet's Rautpohja unit in Jyväskylä, Finland, adopted a non-smoking policy. The policy aims to support the personnel's health, decrease costs and further improve the company's image as a workplace. In addition to Valmet employees, the non-smoking policy also applies to customers and all the people working in the area or visiting it. Approximately 1,250 people work at the Rautpohja factory, with 250 additional workers employed by 50 subcontractors. Rautpohja has about fifty visitors a day. Valmet supports its employees who wish to quit smoking by compensating them for some of the costs of medication and nicotine replacement products used in the treatment of nicotine addiction.[17]

Awards and recognitions

In September 2014 and 2015, Valmet was included in the Dow Jones Sustainability Indices. Other Finnish companies included were Nokia, Neste and Outotec. The indices include pioneers and the best companies in various fields of industry. The operations of these companies are assessed using several sustainability indicators. Being included in the indicees is considered to be recognition of the success of the company's sustainability efforts.[18]

In spring 2015, Valmet won the first prize in the Large Cap category in Best Investor Pages on the Web, a competition organized by the Finnish Foundation for Share Promotion and the Finnish Society of Financial Analysts.[19]

In September 2015, Valmet was recognized as the Marketing Organization of the Year within the business-to-business sector. The selection was made by 185 sales and marketing directors from Finnish Top 500 companies.[19]

Historical products

During its long history Valmet has made e.g. trains, aeroplanes, clocks and weapons. See List of Valmet products.

See also

References

  1. 1 2 3 4 5 6 "Financial Statement 2015" (PDF). Valmet. Retrieved 23 February 2016.
  2. 1 2 "Valmet in brief". Valmet. Retrieved 2016-02-23.
  3. 1 2 3 4 5 6 7 8 9 "Our businesses". Valmet. Retrieved 2016-02-23.
  4. ↑ http://globenewswire.com/news-release/2015/04/01/720995/0/en/Valmet-has-completed-the-acquisition-of-Process-Automation-Systems.html
  5. ↑ "Services". Valmet. Retrieved 2015-11-30.
  6. ↑ "Automation". Valmet. Retrieved 2015-11-30.
  7. 1 2 3 4 "Pulp & Energy". Valmet. Retrieved 2015-11-30.
  8. ↑ "Paper". Valmet. Retrieved 2015-11-30.
  9. 1 2 "Valmet trimmaa alihankkija verkostonsa". Tekniikka & Talous. 2015-09-11. Retrieved 2015-11-12.
  10. 1 2 3 Björklund, Nils (1990). Valmet - asetehtaiden muuntuminen kansainväliseksi suuryhtiöksi [Valmet from weapon factories to international corporation] (in Finnish). Gummerus. p. 333. ISBN 952-90-2552-1.
  11. 1 2 "Valmet saa hallituksen puheenjohtajan Ruotsista". Kauppalehti. 2015-01-22. Retrieved 2015-11-12.
  12. ↑ "Valmetilla vauhti päällä". Kauppalehti. 2015-01-20. Retrieved 2015-11-11.
  13. ↑ "Valmetilla ja Metsolla iso yrityskauppa: arvo 340 miljoonaa". Taloussanomat. 2015-01-15. Retrieved 2015-11-11.
  14. ↑ "Valmet ostaa liiketoimintaa Massimiliano Corsinilta". Talouselämä. 2015-07-31. Retrieved 2015-11-11.
  15. ↑ "Board of Directors". Valmet. Retrieved 2015-12-02.
  16. ↑ "Research & Development". Valmet. Retrieved 2015-12-02.
  17. ↑ "Valmetin tehtaalla tumpataan tupakat lopullisesti". Suomen ASH. Retrieved 2015-11-11.
  18. ↑ "Nokia, Neste, Outotec ja Valmet Dow Jonesin kestävän kehityksen osakeindeksiin". Kauppalehti. 2015-09-10. Retrieved 2015-11-11.
  19. 1 2 "Valmet päihitti Koneen ja Wärtsilän". Markkinointi & Mainonta. 2015-09-07. Retrieved 2015-11-11.
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