Finland Times

File Photo Lehtikuva.

When many believe that giant pulp mills will never return to the western world, a Finnish company has invested heavily in building a bioproduct mill to seize business opportunities from China's economic reform and development of the country's growing market.

 

Metsa Group, one of the world's largest soft wood pulp producers, is turning the largest forest industry investment in Finland ever into reality in April 2015.

 

The decision to start the 1.2-billion-euro (about 1.31 billion U.S. dollars) project to replace the 30-year-old mill in Aanekoski, a tiny town surrounded by forest in central Finland, mainly depends on the world's increasing pulp consumption, and the fastest growing market -- China.

 

"If you look at the past years and the upcoming years, we would say the pulp market is increasing at about 1.5 percent annually," Mill Manager Camilla Wikstrom told Xinhua at the construction site of the new mill. Behind her, excavation and casting work were being carried out, and the boiler and large pulp towers were being installed.

 

The mill, which is expected to produce 1.3 million tons of pulp after it starts operation in 2017, will boast extensive product portfolio as well as high energy and environmental efficiency.

 

China's demand for pulp also grows against the increasing amount of consumer products including the emerging e-commerce. "Demand for packaging materials is increasing and usually paperboard is the best alternative,"  said Wikstrom. Moreover, demand for tissue products, like toilet paper and kitchen paper, is also increasing all the time.

 

Metsa Group is one of the hundreds, if not thousands of Finnish companies that have been doing business with China. Some 400 Finnish companies have had their presence in China so far. Among them are other big names like Nokia, Kone, Stora Enso and UPM, which have been helping with and benefiting from the process of Chinese urbanization.

 

In recent years more small- and medium-sized companies have joined, eager to have a slice of the action when Chinese industries are undergoing a massive structural reform.

 

File Photo Lehtikuva.

Enersize, a company with only nine persons, has secured three contracts with Chinese customers. It helps Beijing Optoelectronics (BOE) and Beiqi Foton Motor, both based in Beijing, to reduce electricity consumption in the compressed air system.

 

While refraining from disclosing the value of the contracts, Enersize's CEO Sami Mykkanen said his company has helped BOE to save 13 percent of energy consumption equal to 3.7 million yuan (587,300 U.S. dollars), and the next target is 25 percent of energy saving equal to 7.1 million yuan (1.12 million U.S. dollars).

 

Right now, about 30 percent of Enersize's revenue comes from China, and Mykkanen believes the contribution will amount to 80 percent by the end of this year. He said his company is negotiating nearly 30 projects with Chinese partners and only five or six are to be executed in 2016.

 

Emphasizing the importance of the Chinese market, Mykkanen said: "In 2014 we asked ourselves if we would focus on the European market or the Chinese market. Then we made the decision that we would put all our power in the Chinese market."

 

Mykkanen admitted the slowdown of economic growth in China may disturb many businesses, but he saw it as an opportunity for Finland, a country packed with engineers and specialists in clean technology.

 

"It doesn't mean it does not need energy savings," he affirmed, "If some factories slow down, they need to find a way to save money. We can help them save the money if we make energy saving projects for them. We can help them go over this downside."

 

The comment was echoed by Lassi Noponen, chairman of the board of Cleantech Invest, a listed investment company that has majority shares of Enersize.

 

"I have been expecting Chinese growth to come down from the impossible 10 percent, but this is still a very high growth market. We are supplying technologies and products that will help the Chinese economy continue to grow while reducing its harmful environmental impacts," said Noponen.

 

Noponen believes the new five-year plan for China's socioeconomic development in the 2016-2020 period will lead to higher demand for energy efficiency, a situation the companies like Enersize can continue to benefit from.

 

Cleantech Invest has invested in 15 Nordic clean technology companies, and one third of them have been doing business with China, stressed Noponen.