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Dr. Heinz Felder, Head of Group Investments & Capex at Stroa Enso (in the middle)

Fiber industry

A rethink for new markets

The paper industry is currently going through the greatest change an industry can imagine: its traditional market of newsprint and office paper is shrinking by 5% every year. “It’s an irreversible trend,” says Dr. Heinz Felder, Senior Vice President Investments & Energy at Stora Enso. We spoke to him about how his company is managing this change and which new markets are replacing its traditional areas of business in times of digitalization.

Everybody is currently talking about Industry 4.0, the Internet of Things, and digitalization – Dr. Felder, how did the paper industry manage to adapt to digital change so far?
Heinz Felder: After a phase of getting to grasp with the opportunities and threats of digitalization, the leading companies in our industry have formulated digitalization strategies and performed studies as well as some pilot work on digitalization projects. We would still consider ourselves as digitalization “beginners”.

And although the industry is just embarking on its journey towards the digital age, what will the future digital trends in the paper industry be?
Heinz Felder: There are three areas impacted by digitalization: We will see new business models, and intelligent packaging is a good illustrative example. Secondly, we will see the impact of industrial digitalization on operations in using predictive maintenance and predictive process modeling of our operations. And thirdly, we will see the impact of digitalization on our business processes where for instance robotics and machine learning will drive change in the future.

Are there any obstacles to be overcome in order to cope with this change in the industry – and if so, which ones?
Heinz Felder:
I would not say obstacles to be overcome, but rather challenges to be tackled. Digitalization is only an enabler to do things better in sales, operations, and business processes. The challenges are twofold: prioritize digitalization areas where there is a good business case and speed – once you have performed a successful pilot in one area, how do you roll it out fast to the other areas.

 


How does Siemens proceed in order to be a partner of trust in these times of digital change?

Heinz Felder: Siemens is one of the partners of our industry who is proactive and who has clearly understood that only partnering is a viable option to develop digital initiatives in our industry. This is no longer a conventional customer-supplier relationship. It rather requires a great deal of trust and openness from our side, and we feel comfortable with the Siemens approach. We hope that Siemens will continue the fast pace of developing digitalization themes and offering them to different industries to the benefit of our industry.

Where do you see opportunities for new products and ideas?
Heinz Felder: There are many areas of growth – for example, packaging, chemicals, and textiles. And if we look beyond fibers, trees are a source of many other chemicals with great potential: lignin, which we use to produce biological binding agents for chipboard, or raw materials, such as hemicellulose, which could form the basis for new biochemicals. In terms of our global activities, we also need to do some rethinking: Latin America is increasingly becoming one of our key markets for obtaining cellulose, the base raw material for our business. Beyond this, the important consumer markets, such as Asia and specifically China, where we are currently investing in a major factory for packaging board, are a key priority.

Does this change of focus also affect processes within the company?
Heinz Felder: Definitely. Paper manufacturers traditionally invest only limited resources in research and development. Our culture will experience a drastic change here – not only in allocating budgets and investments, but also when it comes to our employees’ qualifications. We will move with this shift in culture and expertise, while retaining our values. We are a company with a very strong commitment to the people who work for us. Nothing about that will change, even if our production is located in Uruguay or Pakistan. But our business is becoming more diverse and complex, and we need the right products, able employees, and, not least, appropriate technologies to meet this change.

What challenges does the future hold?
Heinz Felder: Sustainability is at the heart of our corporate success. We want to use a minimum of fresh water in our factories and go towards energy self-sufficiency. We are also working hard to lastingly reduce our specific energy consumption and fossil carbon emissions. At the same time, we are continually optimizing and reducing our plants’ process energy consumption – to give you a couple of examples: controlling pumps with frequency converters, deploying heat recovery measures and intelligent LED lighting of production halls and storage areas. Suppliers like Siemens aid this process with appropriate solutions and products, and we have set aside a special investment fund so that our plants can take the necessary action. The results show that this investment genuinely pays off.

Dr. Felder, thank you for talking to us.

Picture credits: Publicis (1), Stora Enso (2)