Wood based urban construction - is wood industry ready to take the challenge? 24 May 2013 / Matti Mikkola, SVP, Stora Enso Building & Living 1
Building scenarios by main markets Low construction market growth, fierce competition and high wood prices are expected to continue Housing starts in Europe, USA and Japan 140 Index 2003 = 100 120 100 80 60 +5.7 +0.6% +4.3% Cumulative 2012-18: USA +102% Europe +22% Japan -15% -6.5% +24% USA Europe Japan 40 +27% 20 Forecast 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Stora Enso Building Solutions - Matti Mikkola 24 May 2013 Sources: Euroconstruct, Consensus Forecasts, NAHB 2
European market provides a huge potential for wood based construction ~ 0% Housing starts (2011) 12 10 Non-wood Wood-frame Million housing units 8 6 4 2 10% 55% 80-90% 0 China Europe Japan USA Stora Enso Building Solutions - Matti Mikkola 24 May 2013 3 3
Building and constrcution Key drivers for construction companies 1. Profitability No unexpected risks 2. Building companies = project management companies Subcontracting 3. Regulations OHS, energy... 4. Brand and strategy Sustainability Customer demand Stora Enso Building Solutions - Matti Mikkola 24 May 2013 4
Europe can be divided into three geographical markets Differences in company structures and customer demand 1. Nordic Total solution 1. 2. West-Europe Engineered and erected 3. Central-/East-Europe Product with added features 2. 3. Stora Enso Building Solutions - Matti Mikkola 24 May 2013 5
Customer expectations Basic requirements are not that many Risk free solution that is: Technically reliable Approved by the authorities Competitive against other systems...and in erected form Stora Enso Building Solutions - Matti Mikkola 24 May 2013 6
Customer expectations What does it mean for us as a supplier - Risk free solution Tested solutions, references needed Stora Enso Building Solutions - Matti Mikkola 24 May 2013 7
Customer expectations What does it mean for us as a supplier - Technically reliable Home work done, also jointly with the industry Stora Enso Building Solutions - Matti Mikkola 24 May 2013 8
Customer expectations What does it mean for us as a supplier - Approved by the authorities Direct discussions and partly with the industry Stora Enso Building Solutions - Matti Mikkola 24 May 2013 9
Customer expectations What does it mean for us as a supplier - Competitive against other systems Industrially manufactured Stora Enso Building Solutions - Matti Mikkola 24 May 2013 10
Business concept precondition for successfull business 1. Partner (financing, continuity and repetition) Stora Enso Building Solutions - Matti Mikkola 24 May 2013 11
Business concept precondition for successfull business 1. Partner (financing, continuity and repetition) 2. Deep end-use knowledge and understanding Stora Enso Building Solutions - Matti Mikkola 24 May 2013 12
Business concept precondition for successfull business 1. Partner (financing, continuity and repetition) 2. Deep end-use (segment) understanding 3. Local know-how and a clear role in the market Stora Enso Building Solutions - Matti Mikkola 24 May 2013 13
Business concept Wood industry is still struggeling with the conceptual approach and role definition One off projects Lacking focus and repetition Lack of industrial solutions Limited prefabrication and too much work at the building site Weak/unclear position in the value chain Still in many cases the material supplier without any role at the building site Mainly regional approach Difficulties in scaling the business Often uncompetitive against other materials Stora Enso Building Solutions - Matti Mikkola 24 May 2013 14
Stora Enso approach Starting with individual projects > 1500 delivered projects Optimized building systems > optimized use of CLT High level of industrial prefabrication Single family houses through partners Focus on urban concepts B2B Stora Enso Building Solutions - Matti Mikkola 24 May 2013 15 15
Ready to take the challenge. References Stora Enso Building Solutions - Matti Mikkola 24 May 2013 16
Assisted-living project, Rauma Finland
The Finnish Nature Centre Haltia, Espoo
Residential area development, Austria
School, Austria
Residential multi-storey project, Luxembourg
Bridport House rental apartments, London UK
Dock Square Library, Melbourne Australia
Polaris Residential apartments, Milan Italy
Residential development, Graz Austria
Residential project Lintuviita, Seinäjoki Finland
Urban development Wood City, Helsinki Finland
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