MJ: Following Metsä Wood’s 2013 results, you predicted better times ahead. Has the forecast held?
Esa Kaikkonen: Yes. First quarter operating results were better [€105m against €89m, on sales down €10m at €1.25bn] thanks to a combination of efficiency measures and slight sales price rises.
MJ: You also mentioned plans to simplify supply chains. Can you elaborate?
EK: It involves management of logistics to improve reliability and harmonise operating methods across sawn timber, plywood and construction products.
MJ: How is the UK market now viewed by Metsä Wood?
EK: It’s become stronger during the past 12 months and we expect the recovering economy and construction sector to boost demand further through the summer.
MJ: There has been a shift of Nordic supply to developing markets in the Middle East, North Africa, and South-east Asia, notably China. How do you view the future relative importance of these markets versus Europe?
EK: We’ll continue exploring these new growing markets, but still strongly believe Europe will always be our main outlet.
MJ: What have been your key recent product developments and investments?
EK: We’ve focused on developing new Kerto-LVL and plywood applications and reviewed our product range together with DIY retailers to improve competitiveness. And in terms of investment, we’ve redeveloped our Vilppula site to be more flexible at a cost of €30m. We’ve installed a new infeed, green sorting facility and sawline, giving annual capacity of 450,000m³.
MJ: How are the company’s engineered products developing?
EK: Kerto-LVL is a core product and its development constant. But Leno was divested last year with the Merk business.
MJ: Some Nordic suppliers, such as Setra, Martinsons and Stora Enso are vertically integrating through to timber-based building. Is that a path for Metsä Wood?
EK: We don’t believe in competing with construction customers. We want to grow with them by offering competitive products and services.
