M-Real

Source: Manufacturing Digital

Date :26/10/2007 15:27:33

High growth products

M-real is one of the leading producers of paper and paperboard in Europe. The company develops products and services for magazines, brochures and office papers

Written by Rebecca Waters & Produced by Rahim Ali

Headquartered in Finland, M-real Corporation is part of the Metsäliitto Group, the eighth largest forest industry group in the world, employing over 13,000 people. The company has 25 production units in nine countries, Austria, Belgium, Finland, France, Germany, Hungary, Sweden, Switzerland and the UK. Of these, the company has three technology centres in Finland, Germany and Sweden which focus on the development of new products and services to meet customers’ needs in specific areas.

M-Real also has an extensive sales network with offices and representatives in more than 70 countries.

History

The foundations of the company were laid by G.A Serlachius in 1864 following his establishment of a groundwood factory in Mänttä, Central Finland. Following the paper mill’s completion in 1881, Metsäliitto Cooperative was established as a wood exporting company in 1934. Over the years, the company has undergone many changes including a merger between Metsäliiton Teollisuus Oy and G.A. Serlachius Oy in 1986, and subsequently nine acquisitions, forming M-real Corporation in 2001.

M-real aims to achieve long-term profitability. In its core business areas: consumer packaging, publishing, commercial printing and office papers - together with Map Merchant Group (Map) M-real’s fully owned subsidiary - the company aims to be the first choice provider of high quality products and solutions using these business areas as a framework to extend an already strong market position.

M-real provides wood fibre-based solutions for consumer packaging, communications and advertising end-uses. The company have a vast product range which it provides to its customers, including publishers, printers and converters, paper merchants, office paper users, resellers and well known brand owners.

The company develops a range of paper and paperboard which are used in printed advertising and marketing, corporate materials, magazines, books, desktop and high-volume printing and copying and packaging applications & services. These include graphic boards and papers for flexible packaging, labelling and self-adhesive laminates as well as cartons for health and beauty care products, cigarettes, branded food and consumer durables which have been used in some of the biggest brands. It also produces Carta, Avanta, Simcote, Simwhite and Kemiart paperboards.

Publishing Innovation

M-real also has a well established global publishing business, providing papers such as EuroArt, Data Copy, Logic and Galerie Papers which are used globally in leading magazines, catalogues and promotional materials.

Renowned for their innovation and outstanding image reproduction, Galerie papers combine high surface smoothness and brightness with higher than average bulk and capacity. The range aims to manage the challenges of ensuring a smooth production process and to reduce costs whilst maintaining quality standards.

The core business of Commercial Printing is coated graphic fine papers. M-Real is one of the leading producers of coated and uncoated fine papers sheets in Europe with particularly strong market positions in Central and Eastern Europe, in the Nordic countries and in the UK.

Commercial Printing’s sheet deliveries are distributed through merchants, while reels are mainly delivered directly to printers. Its end-users are primarily professionals in marketing and corporate communications. Its typical uses include annual reports, brochures, inserts and leaflets. The product range includes several well established and strong brands.

In addition, the company offers a range of products for office applications, from high-volume printing and copying to image-based colour communications and forms and envelopes - part of M-Real’s Office Papers business area.

A leading supplier in Europe, M-Real’s office papers have a favourable brand position as well as strong production volume and sales. The company’s market position is further enhanced by its recycled products.

Wood is M-real's most important raw material – being both renewable and recyclable. M-real does not own any forests and is therefore a large purchaser of wood, mainly from private forest owners. M-real's wood procurement is handled by the company's parent company Metsäliitto – a cooperative of more than 130,000 Finnish private forest owners.

In line with its Corporate Responsibility policy, M-real uses wood raw material from sustainably managed forests. M-real's corporate policies provide tools and guidance for the consistent application of its principal values and concepts throughout the company. These policies are regularly reviewed by the company in order to achieve its objectives.

Restructuring programme

Since 1996 the company has successfully built a business around higher growth products, generating €5.6 billion in annual sales in 2006, an increase of seven percent on the previous year.

With the expectation of continued growth in key markets in Eastern Europe and the demand for paper to increase, M-Real looks to build upon its success in 2006 in order to reach its financial target and further increase its profitability.

In order to compete with the changes in the European paper industry, the M-Real board of directors began a strategic review of its business structure – which resulted in an extensive restructuring programme for 2007.

The program included closures of production capacity, a new cost savings programme and divestments of assets.

In the future, the company aims to develop its strength and profitability. In order to achieve this, CEO Mikko Helander says M-real must be able to rise paper prices.

To actively pursue this, one step that the company has taken is closing down capacity in Europe. These include the closure of Sittingbourne mill and two paper machines Gohrsmuhle. M-Real will also actively invest more into its Consumer Packaging business area.

Code of conduct

M-Real has a code of conduct that sets out common values and ethical principles to be applied throughout the group. These are managed into sub-sectors with individual policies and areas; corporate governance, corporate responsibility, environmental policy, HR related policies, investor relations policy, legal affairs and risk management.

The company’s corporate governance policy is decided by the Board of Directors.

M-real complies with the rules and recommendations of the Helsinki Stock Exchanges, where it is listed. The duties of the various bodies are determined by the Finnish Companies Act and Finnish Securities Market Act, as well as other relevant laws of Finland.

The group’s corporate responsibility integrates the company’s economic, social and environmental responsibilities with the demands of its stakeholders.

The Environmental policy specifies how the company integrates environmental management as part of all business activities. The policy ensures that the company's responsibilities, its use of raw materials and energy, product safety, product development and open dialogue maintain positive environmental practice.

M-Real’s HR strategy defines the key development areas for corporate and business areas to use in their people management activities and investments. The Occupational safety and well-being policy sets company-wide standards for responsibilities, transparent reporting, target settings and corrective actions. Health and safety matters are managed by individual operational units.

Listed on the Helsinki Stock Exchanges, M-real follows the Securities Market Act and is supervised by the Finnish Financial Supervision Authorities. As a publicly listed company, it is in M-Real’s interest to effectively communicate with the financial community and other stakeholders in order to achieve its securities fair valuation and increase the shareholder value.