are done, we are the best”. That is a kiss of death to any company.
What we have done is a kick-start of an improvement path. But it is only a start; we have covered maybe 30 of our journey, but 300 still to go – and I say that intentionally, my math is not that bad – as you can never say you are truly there. In parallel with the cost reduction work that needs to continue we now also want to build new, profitable growth through plantation-based pulp, fiber-based packaging as well as selected paper grades. The key is our ability to build a sustainable competitive edge through product differentiation, innovation and customer relationships. This approach may not be so common in our industry, but it is very necessary.
Latin America is obviously of growing importance to your plans for the future, can you enlarge upon your operations there, starting with the recently announced Arauco/Stora Enso joint venture ‘Montes del Plata’.
Montes Del Plata, (Silver Forests), our brand new joint venture with the Chilean company Arauco, has already hit the ground running – the studies of optimum mill location and feasibility studies are on-going. Intentionally named to be an Uruguayan company, Montes Del Plata and Stora Enso jointly have one simple goal: with a very solid land and plantation base (256,000 hectares), the experience of both Arauco and Stora Enso on plantation based pulp - and a uniquely welcoming small nation of Uruguay - we plan to build the best pulp mill in the world, in all respects – from cost and productivity to environmental and social responsibility. We want to be a good, welcomed neighbour. And I say that even though I am also known to claim that today the best pulp mill in the world is our joint venture with Fibria – Veracel in the state of Bahia in Brazil.
Yes, Veracel II is another very interesting growth
option for us with a strong local partner Fibria. We are
right now jointly reviewing plans and timing of this
option - and of course the Veracel crew know that we
want to build the best mill in the world with Veracel
II, even better than the first line Veracel I. So it will
be a positive race to be the best. Just like our Arapoti
paper mill that is a benchmark both in quality and oc-
cupational heath and safety worldwide for the group
- and my guess to a large extent in the industry, a very
impressive team.
As I have said before we are never ready. We also definitely need to get the overcapacity significantly reduced in Europe. Even if we may have done quite a bit I will never say “we have done our share, now it is the other peoples turn”, that in fact is in my view a dangerous attitude. As you know we have announced both definitive as well as potential plans for further capacity reductions last August and we will follow up on those in the coming months and quarters.
The list of challenges is long - from overcapacity to raw material and energy availability and costs – on and on it goes. And maybe the most important challenge - our ability to find sustainable competitive differentiation in products, customer service models as well as significant cost deltas. That is the thought I grew up with in other businesses and happen to believe that it is a pre-requisite to creating sustainable earnings.
With the three years of experience I think the industry does understand the issues, and even the solutions – the question is if we can execute, and execute fast enough. Doing exactly the right things, but just a little too slow – well we all know where that leads. The industry must change itself. We have long enough hoped, waited and even asked for others to solve our issues. In fact I think the drama, or even trauma, of recent years should be the call for action for all of us. It will not be the EU or any national government that can solve the industry issues - in fact some of the capacity increasing
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