Kemira spins off coatings arm in new strategy

18 June 2008 15:45 [Source: ICIS news]

Pulp & Paper remains as core Kemira segment By Sverker Nyman

STOCKHOLM (ICIS news)--Increasing raw material prices, soaring energy prices and the weak US dollar have forced Finland’s Kemira to adopt a new strategy focusing on fibre and water treatment, the fertilizer and industrial chemical company said on Wednesday.

Tikkurila, the coatings arm of the company, will next year be spun off into a public company on the Helsinki Exchange, with Kemira remaining as a major shareholder.

An annual savings target of more than €50m ($78m) may also lead to a reduction in personnel of about 1,000 employees worldwide and the sale of businesses.

Streamlining of the global functions may lead to a consolidation of production sites, R&D facilities and the warehouse network, but is is not clear which sites will be affected, Kemira said.

Kemira will reorganise its business into three-customer based segments, effective from the start of October.

The Paper segment will focus on the pulp and paper industry, the Water segment serves customers in municipal and industrial water treatment and the Oil and Mining segments will target oil, gas and mining industries where water treatment chemicals are of great importance.

"According to our strategy we will first concentrate on reinforcing the balance sheet, generating positive cashflow and improving profitability," said Harri Kerminen, president and CEO of Kemira Oyj.

"During the second phase we will seek strong organic growth," he added. Structural changes and our customer focused strategy will help us achieve our financial targets for growth, cashflow and balance sheet structure during 2009".

Kerminen cited effective cross-selling, active pricing, completing current integration programmes, increasing utilisation of production units, building a lean global logistics network and cutting costs to increase internal efficiency as priorities.

To lead the reorganisation, Jyrki Maki-Kalam, currently president of Kemira Pulp & Paper, has been appointed chief financial officer (CFO) of Kemira. Current CFO Esa Tirkkonen will continue his work as deputy CEO of Kemira Oyj until his retirement in 2009.

Petri Helsky, currently vice-president responsible for the ChemSolutions business unit, has been appointed president of Paper.

Pekka Ojanpaa, currently responsible for the water business area, has been appointed president of the new Water segments, while Randy Owens has been appointed president of the new Oil and Mining segment.

Lastly, Hakan Kylander has been appointed regional head of Kemira Europe. All of these appointments will take effect from 1 October 2008.

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By: Sverker Nyman
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