Kemira shared its sharpened strategy this spring. The company is seeking growth particularly in the pulp, paper, oil, gas and mining industries by developing products and providing innovations that enable Kemira to stand out from the competition.
“Where water meets chemistry” is the essence of Kemira’s sharpened strategy. President and CEO Wolfgang Büchele shared the strategy this spring along with the first quarter results for 2013:
“Water and chemistry interact, no matter where you look: drilling, treatment of drilling water, paper manufacturing or municipal water treatment. Together, water and chemistry bring benefits to our customers.” In 2012, Kemira launched a restructuring program that focuses on streamlining the company’s organizational structure, improving internal efficiency and optimizing its manufacturing network. “We are well underway deliver an EBIT margin of 10 percent in 2014 through our Fit for Growth restructuring measures. Continuous efficiency improvement will remain key for successful strategy implementation,”says Büchele.
“Water and chemistry interact, no matter where you look: drilling, treatment of drilling water, paper manufacturing or municipal water treatment. Together, water and chemistry bring benefits to our customers.” In 2012, Kemira launched a restructuring program that focuses on streamlining the company’s organizational structure, improving internal efficiency and optimizing its manufacturing network. “We are well underway deliver an EBIT margin of 10 percent in 2014 through our Fit for Growth restructuring measures. Continuous efficiency improvement will remain key for successful strategy implementation,”says Büchele.
Kemira’s sharpened strategy has four key areas: business focus, growth, geographical focus and innovation. Kemira’s business segments — Paper, Oil & Mining, Municipal & Industrial and ChemSolutions—have different roles within the strategy. “We have two segments that focus on growth and two that focus on cash flow generation,” Büchele explains. The company seeks growth particularly in the Paper segment and the Oil & Mining segment, with the Municipal & Industrial segment aiming at profitability improvement and cash flow maximization with ChemSolutions. “The sharpened strategy further increases the significance of the Paper and Oil & Mining segments, which are expected to outpace market growth,” says Büchele. He believes that the strong focus on specific industries will boost the company’s performance. “Customers will see that we are committed to their needs and capable of delivering solutions tailored to their needs.” Differentiated product lines—such as polymers, sizing products and other process chemicals—will play a substantially increased role in Kemira’s product portfolio. The demand for differentiated products has been increasing for a long time, and they hold great growth and innovation potential. In basic chemicals, the goal is to maintain the present capacity and manufacture and deliver products as cost-efficiently as possible.
Innovation
Innovation is a cornerstone of growth for Kemira. “The chemical industry is one of the most innovative industries,” says Büchele. In terms of innovation, Kemira focuses on differentiated product lines. “Research and development give us a competitive edge in markets related to water quality and quantity management. We will focus on process improvement innovations for the paper, oil, gas and mining industries as well as on the related product lines, such as polymers, sizing products and other process chemicals. This enables us to create new products and stand out from the competition,” says Heidi Fagerholm, Chief Technology Officer, Kemira. According to Fagerholm, Kemira’s strengths include its global R&D network and the ability to collaborate with various industries. “In addition to high expertise in chemistry, the members of our R&D team have a profound knowledge of our customers’ industrial processes,” she says. Process knowledge leads to an ability to identify new business opportunities. “We can develop projects based on real business demand,” says Fagerholm.
Kemira intends to invest increasingly in the research and development of innovative products. Funding for related projects in the future will represent approximately 4 percent of Kemira’s revenue. By 2016, the company intends to double its innovationdriven sales—that is, the sales of new products or new applications of existing products introduced to the market within the last five years. The goal is for innovation sales to constitute 10 percent of revenue in 2016.
Europe and North America continue to be important markets for Kemira. Of emerging markets, China and Indonesia are the key countries for Paper, and Oil & Mining is targeting expansion in selected countries in South America, the Middle East and Africa.
