 | Billerud is one of Europe’s leading manufacturers of Nordic long-fibre sulphate pulp and a strategically important supplier to several major paper producers. Billerud’s mills manufacture more pulp than can be used in internal paper production so the surplus, around one quarter of total pulp production, is sold on the open market. Customers are mainly in Europe but are also based in other parts of the world.
Paper for different requirements
Billerud’s customers produce paper for various applications. More than half of the pulp produced is used to make writing and printing papers. Other important applications are tissue paper and wrapping paper. Billerud’s pulp creates a stiff paper that contributes to efficient production which is highly appreciated by the paper manufacturers.
In addition to being bought by the traditional paper industry, Billerud’s pulp is used for products such as leather patches for jeans and insoles for shoes. The reason is that one of Billerud’s products absorbs latex faster than other materials, which is a big advantage when producing artificial leather. Another exciting application is as a binding agent for pharmaceutical tablets.
A soft, smooth surface
Billerud’s pulp is appreciated in tissue products such as toilet paper, kitchen paper and serviettes. The properties of the pulp contribute to the high strength of the paper and produce a soft and smooth surface that is specially appreciated in toilet paper. In the production of kitchen paper it is mainly the high strength of the pulp that is appreciated by paper manufacturers.
Strong environmental profile
The company’s environmental profile is very important on a market where more and more consumers require certified products. At the end of the 1990’s Karlsborg became the first pulp mill in the world to achieve FSC certification. FSC stands for Forest Stewardship Council, an international organisation that promotes environmentally adapted, socially beneficial and economically sustainable management of the world’s forests. Today Billerud’s pulpmills are accredited with the FSC and with the PEFC, the Programme for the Endorsement of Forest Certification schemes. This enables Billerud to sell certified products in relation to the volume of certified materials it purchases.
Transport is a major cost and efficient logistics are an important competitive factor. Transport also has a big impact on the environment. Billerud works proactively to make transporting pulp from its mills to customer plants as efficient as possible. Lorries have now to large extent been replaced with trains and today Billerud is one of five part owners of ScandFibre Logistics, which uses the railway exclusively and currently handles around two million tonnes of products per year.
Close customer relations for many years
Billerud has built up very close relations with customers over the years. Some companies have been buying from Billerud since the 1960’s. By offering good service, extensive technical expertise and efficient logistics, Billerud has strengthened its position as a supplier. In order to further extend co-operation with key customers Billerud arranged a number of seminars during the year. This initiative received a positive response and in several cases resulted in an invitation to share know-how and experience with customers’ customers.
Focus on quality and profitability
A moderate restructuring of the pulp industry is taking place. A number of pulp producers in the northern hemisphere, mainly in North America, have closed due to ageing plants and poor profitability. Meanwhile new players, mainly in South America, have emerged. Billerud aims to maintain a strong position on the market by focusing on quality and profitability for everyone involved. In 2005 the objective was to move away from the more competitive areas and increase the proportion of customers who value quality and competence to a higher extent.
Earnings performance
Compared with 2004, net turnover fell by 20% to MSEK 1,128 (1,415). Deliveries declined by 4%, mainly due to internal deliveries to the recently acquired Beetham mill. The operating loss was MSEK 75, a fall of MSEK 267 compared with the previous year.
The drop was mainly due to changed exchange rates and higher variable costs. The average price of long-fibre sulphate pulp fell to USD 610 per tonne in 2005 (USD 620 in 2004). |
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