Valmet has three business lines – Services, Pulp and Energy, and Paper. “Valmet has a leading market position in all of its businesses,” says Pasi Laine, who has been appointed Valmet’s future President and CEO. “Our global presence and the fact that our global operations are close to our customers give us a strong foundation for leveraging future growth as market demand recovers. The board, tissue, pulp, and energy markets are all set to grow over the long term and there are good opportunities for growing our services business.”
Valmet’s Services business line has annual net sales of over Euro 1 billion and the overall size of the services market is estimated to be over Euro 7 billion. “A stable, growing, and profitable services business will even out the cyclical nature of Valmet’s other businesses and provide a solid base for improving our overall profitability,” says Laine.
“As a result of changes in the paper and energy markets, the demand for papermaking and bioenergy technology has declined,” he continues. “Improving profitability is a clear priority for us here. A number of initiatives aimed at enhancing our profitability are already under way, and our efficiency enhancement program is progressing to a rapid timetable.”
“Given the support that our technology and services operations provide each other, it is important for us to continually strengthen our technological know-how,” continues Pasi Laine.
Valmet expects demand to remain satisfactory in its Services business line. In its Pulp and Energy business line, Valmet expects the demand for pulp mills and rebuilds to remain satisfactory, while demand for power plants based on renewable energy sources is expected to remain weak.
In its Paper business line, Valmet believes that structural changes in the paper industry are likely to continue and expects that demand for paper and board making lines will remain weak. Demand for tissue production lines is expected to remain satisfactory.
Going forward, Valmet will assess the market outlook for its services, pulp, energy, paper & board, and tissue businesses separately. Three terms – good, satisfactory, and weak – will be used to characterize the short-term market outlook for these businesses.
Going forward, Valmet will assess its profitability on a business line basis and characterize performance using three terms: good, satisfactory, and weak. The current profitability of the Services business line is satisfactory, while that of the Pulp and Energy business line and the Paper business line is weak.
Valmet has responded to market developments by reducing its capacity and improving the efficiency of its operations and cost structure.
As of January 2014, Metso's Pulp, Paper and Power business will serve its customers with an even more focused and competitive approach as an independent, listed company, Valmet Corporation.