How Successful Plywood Companies Are Running Their Operations in Latin America

Transcription

1 How Successful Plywood Companies Are Running Their Operations in Latin America Panel & Engineered Lumber International Conference & Expo March 21, 2014, Atlanta, GA Tapani Kiiski, President and CEO, Raute Corporation

2 Content Raute in Brief General on Plywood Industry in Latin America Raw Material Focus on High Quality Investing in the Most Efficient Technologies 2

3 Raute in Brief

4 Established in 1908 Inland waterway vessels, steam boilers and engines, furniture and industrial scales Plywood machinery since 1930 Former Soviet Union the most important market until late 80s Subsidiaries: USA in 1974, Canada in 1984, etc. Sales offices: Singapore, Chile and China, etc. 1990s Listed on Helsinki Stock Exchange in 1994 Some milestones in the History Focus on veneer based wood products only since 2004 Acquisitions and new technologies: Panel handling tecnology in 2000 Machine vision technology in 2000 Sliced veneer production technology in 2005 Production plant in Shanghai in 2006

5 Products, services and customer industries Raute s customer industries Plywood and veneer industry decorative veneer industry LVL (Laminated Veneer Lumber) industry Raute s products and services Project deliveries: Complete mills, production lines, stand-alone machines and equipment Automation, machine vision applications and instrumentation The products of the customer industries are used in investment commodities The most important customers of the customer industries are construction, transport, furniture and packaging industries Technology services: Maintenance, spare part and modernization services Consultation, training and business support services Competence synergies: Technology, customer, project 5

6 Profitable solutions for all customer needs Emphasis between the key strategic objectives varies according to changes in the market situation. Raute generates added value for its customers business by supplying solutions to facilitate profitably sustainable production of wood products Raute offers profitable solutions for all customer needs The preferred solution provider with attractive offerings to meet different customer segment needs globally The trusted local life cycle partner for production process optimization Among three leading suppliers in selected emerging markets through targeted product range Cost-efficient and agile processes with good quality across the global network Preferred company for competent people to achieve together 6

7 Plywood production and consumption in 2000, 2005, 2010, 2011 and 2012 (million m 3 ) Plywood production and consumption Ply Production Consumption ,4 59, ,3 72, ,5 81, ,2 81, ,2 83,6 Plywood consumption by end-use category 2012 Total 83.6 million m 3 7 Transport 6 % Packaging 11% Flooring 5% Others 13% Furniture 28% Construction 37% Plywood production by market area 2000, 2005, 2010, 2011 and 2012 (1,000 m 3 ) NAM EMEA Russia LAM China Rest of APAC Total

8 Local presence globally Finland: Nastola, Kajaani, Jyväskylä 383 persons, 72,0 % North America: Vancouver B.C., Memphis, TN 53 persons, 10,0 % Latvia, Riga 1 person Russia, Moscow, St Petersburg 8 persons China, Shanghai 76 persons, 14,3 % Singapore 6 persons Raute Agent Chile, Santiago 4 persons Australia, Myrtleford 1 person Number of personnel on September 30,

9 Income statement and key figures MEUR Net sales Operating result Financial income and expenses Result before taxes Income taxes Result for the period Earnings per share, EUR Operating cash flow Return on investment (ROI), % Gearing, % Equity ratio, % Personnel (in books)

10 Costomer Benefits Efficient wood products manufacturing by focusing on the most important profitability factors. Most efficient use of raw materials RECOVERY RAUTE FORMULA High and even product quality + QUALITY + x CAPACITY = PROFITABLE PRODUCTION Work hours per production output PRODUCTIVITY

11 Raute s production operations Raute has production operations in Finland, Canada and China Main production plant and product development centre in Nastola, Finland Machine vision technology centre in Kajaani, Finland Panel handling technology centre in Jyväskylä, Finland Production plants in the Shanghai are of China and Vancouver area in Canada Main production plant in Nastola: Size of site: 10.5 hectare Factory area )including product development centre): m2 Office area: m2

12 Product development Product development involves the improvement and further development of existing products and services or the creation of entirely novel products and concepts Raute invests annually 3-4 percent of its net sales to product development Through continuous product development Raute aims to boost the customer s production process and maximize the benefits to the customer: efficient use of raw-material, energy, additives such as glue and coatings high and even product quality high productivity

13 Environment Environment is one of the values that guide Raute s operations. Raute strives systematically to: reduce the environmental impacts of the processes delivered to customers reduce the environmental impacts of its own operations Saving valuable natural resources is a joint goal for Raute and its wood resources utilizing customers State-of-the-art technology reduces the environmental impacts of the customers production processes Nastola plant has ISO certified environment and quality systems

14 Personnel Raute employees are experienced and international professionals Number of personnel: approximately 530 Finland approximately 380 persons Canada, USA, China, Chile, Singapore and Russia, altogether approximately 150 persons Average age: 45 Years of experience with Raute: 14 Training 1-3 days/person/year according to identified development needs Personnel satisfaction at a good level 14

15 Plywood Industry in Latin America

16 South America Plywood production and consumption in South America (million. m 3 ) South America One of the strongest plywood production growth areas High-quality raw material particularly in Chile Chile produces plywood of very good quality End of 2013 and first half of 2014, some 600,000 m 3 of new capacity on line Strong growth and development over all Share of Raute s order intake Raute and South America The structure and development of forest industry provides potential for further growth, Raute has a strong position in Chile and some promising deliveries to Brazil Growth potential exists 16

17 General Brazil is the biggest producer Elliottis Pine and Taeda Pine Tropical hw now mostly replaced by plantation wood Chile a good number two Almost entirely Radiata Pine Smaller and fewer mills in some other countries, mostly based on Eucalyptus and other hard woods Export industry, destined mostly to North America and Europe The most successful companies have been the big Chileans Growth and profitability throughout the down turn! Most of the following refers to these most successful companies 17

18 Long Term Investment in High Quality Raw Material

19 First big Radiata Pine plantations planted decades ago Since that efficient and systematic management and care thinning pruning Optimized use of the entire investment plywood sawn timber pulp energy Long Term Investment in High Quality Raw Material

20 Long Term Investment in High Quality Raw Material Plantations form a valuable competitive edge, which is very difficult and time consuming to imitate

21 Focus on High Quality

22 Plywood quality Stregth and rigidity Holding of screws and other fasteners Durable surface and tolerance to moisture Accurate dimensions Etc. Find the right market segment. Don t compete with OSB and the like! 22

23 How to achieve high quality in plywood prodcution Take good quality raw material pruned logs for clear faces Design and make the production process to produce quality accuracy in and attention on all sub processes avoid over drying grade and sort repair veneers (compose, patch), solid core for strength good and consistent quality glue, accurate and even glue spread accurate and gentle handling 23

24 How the Successful Latin Americans do it? Most accurate centering and block positioning optimizing, automatic calibration 24

25 How the Successful Latin Americans do it? Most advanced veneer grading: visual moisture 25

26 How the Successful Latin Americans do it? Efficient and gentle veneer processing composing patching 26

27 How the Successful Latin Americans do it? Modern glue application technology Careful finishing 27

28 Most Efficient Production Technologies

29 After all, production cost matters However good your quality is, production cost shall be minimized Most signifigant cost elements: raw material labor energy glue 29

30 How the Successful Latin Americans do it? Raw material purchase price is a deal between the forester and plywood producer, technology can not help here accurate centering (refer to quality!) well managed drying, no over drying (again, refer to qaulity!) gentle veneer handling 30

31 How the Successful Latin Americans do it? Labor despite reasonable labor rates, high level of automation throughout the process helps also to maintain consistent and high quality 31

32 How the Successful Latin Americans do it? Energy, an example Optimun drying in high humidity. Enhances capacity and improves quality as well 32

33 How the Successful Latin Americans do it? Glue cost of the entire glue recipe glue spread amount amount of glue defects again relates to quality 33

34 Conclusion

35 No secrets The successful Latin American Plywood producers simply work systematically and diligently: long term work to guarantee the best possible raw material aim at high quality end product investments in the most efficient production process 35

36 Thank you for your interest!