Paper is still needed

Kati ter Horst heads Stora Enso’s paper business in a situation where the entire industry has gone through a major change, brought on by gradually declining demand. Yet paper is still a big business.

Kati ter Horst became the Head of Stora Enso’s Paper Division in 2014. By then, however, she had already worked for the same company for 20 years, most of that time in the Netherlands and Belgium.

This means that ter Horst has witnessed the change underway in the paper industry over the long-term and from a perspective broader than Finland alone.

“The change has been significant, and paper’s share of our net sales has declined from 70 per cent to 30 per cent in a matter of ten years. Nevertheless, paper is still an 18 billion euro business in Europe. Nor has demand declined uniformly across all segments – although newsprint was the biggest of these segments a decade ago, the segment of uncoated fine paper, which is used in copying paper and envelopes, for instance, is becoming the most significant one.”

According to ter Horst, demand for copying paper has remained fairly stable, despite the fact that paperless offices have been talked about for a long time.

“In some cases, the changes do catch on surprisingly slowly,” she says.

Although people increasingly catch up on news via screens, ter Horst still believes in the future of print as well.

“Given that an increasing amount of work is carried out in front of screens, people feel like their workday continues if they continue reading from a screen. This is why they still prefer reading material that is not related to work in another way and in another position. Reading paper books and magazines creates a whole different mood as well.”

Paper also continues to play an important role in advertising.

“Paper is still needed to attract people into shops. Paper is also used in copious amounts in in-store environments.”

More print surface increasingly efficiently

The fact that the paper market is shrinking is nonetheless inescapable.

This being the case, it is clear that investments in the paper segment have to do with increasing efficiency and converting paper machines into machines that produce paperboard, for example. At the same time, industry representatives are figuring out what else to do with a paper machine.

“The name of the game is that we produce paper grades for which there is a market as efficiently as possible,” says ter Horst.

She points out that one of the major trends is introducing lighter paper grades to the market, because postage costs or the aspect of how much paper a print product requires make a big difference to customers.

“In essence, then, we are producing an increasing amount of print surface with less raw material.”

The paper markets have also grown more complex, in that customers are provided with an increasing range of choices in relation to available paper grades.

“In the end, there is a limit to how flexible a paper machine is, meaning that we are fairly bound to the kind of paper a particular paper machine produces.”

The 100 million euro investment in which the fine paper machine at the Varkaus Mill was converted to produce kraftliner base paper for the paperboard industry is an example of the successful conversion of a mill.

“At the same time, we were able to optimise our product portfolio for the remaining mills, and the best orders of Varkaus were transferred to more efficient mills.”

It all started with a summer job

Kati ter Horst first sought employment in the forest industry at the urging of her aunt, back when she was studying marketing at the University of Tampere.

“My aunt worked at the Tako paperboard mill, and she said it was a place where I could put my language skills into use. I ended up working at Tako for a number of summers and occasionally as a substitute during other times, taking care of complaints and keeping in touch with overseas sales offices. I also spent one summer working at Finnboard’s sales office in Paris.”

After receiving her degree in economics, ter Horst went on to complete an MBA in the United States. Her studies included courses on business in Asia, thanks to which she was provided with the opportunity to work for Pöyry in Singapore.

“We performed profitability calculations for banks there, and prepared reports on the outlooks for paper mills. So, when my Dutch husband and I wanted to move to the Netherlands and Pöyry didn’t have an office there, I decided to call Finnish forest industry companies to ask for work. Enso was the first company I called, and I’m still following that path.”

Text by Katariina Krabbe
Photo Jaakko Lukumaa

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