The pulp and paper industry has since early days increased its efficiency by developing new process technologies, switching from rag to wood as raw material and eliminating products with no future.
Over the years, with some ups and downs, it has been a prosperous industry. However, we are now facing a shift which will have far reaching consequences and some old truths on the product side will not apply anymore. Companies, institutes, universities and governmental bodies in countries like Canada, Finland and Sweden are hence very active in finding new ways forward, in particular as the forest based industry is crucial for a move towards less fossil dependence. A growing and interesting trend is cooperation across different industry borders.
Once the different wood based pulp processes were developed during the 19th century and the English universal genius Bryan Donkin developed Nicolas-Louis Robert’s paper machine concept into a working machine, the stage was set for industrialised pulp- and papermaking. These and other inventions triggered a progress characterised by extensive development of processes, bigger and faster machines, better and more consistent products etc. More capable and efficient printing technologies, computer development, office printing, changing shopping habits, increased welfare and education supported the pulp and paper industry’s strong growth. It lasted some 150 years but we are now entering a new era with some value chains losing and others gaining.
Some are favoured, some are not
Since a few years’ back new trends have paved their way influencing our industry more than any other period since the pioneering days. The parts of the industry focussed on printed information are shaken by things like smart phones, social media, paperless administrative systems and ever more people not reading newspapers. On the other hand a growing and aging world population, better living standards, new shopping habits and distribution patterns are trends that support growth in packaging and hygien areas.
In the opening panel discussion of BIOFOR 2017 in Montréal, Glenn A Mason, Assistant Deputy Minister, Natural Resources Canada, summarized the present situation: “Paper will not carry us through the next hundred years!” This statement is equally valid for the pulp and paper industries in Sweden and Finland and a number of research and innovation activities are therefore going on. Finland made a quick and concerted start towards developments and investments in biofuels, chemicals and material based on wood or industrial residual streams but the Swedish wheels are now rolling too.
Increased R&D and inventions coming to market
The Swedish R&D investments in forestry industry related areas on national level are in the region of SEK 4.3 billion, about USD 480 million with the present exchange rate. Industry and foundations contribute with two thirds and governmental bodies make up the rest. In addition to this companies are increasing their R&D investments to develop future opportunities. R&D investments are to an increased extent bigger and more long-term oriented.
In general the Swedish pulp and paper industry focusses on getting the most out of present processes and products by investments and developments. Adding to that, universities and institutes are active in research and innovation, often in direct collaboration with companies. However, in order to successfully develop new product areas cooperation with other industries like chemistry and textile is increasing.
One interesting example is Stora Enso investing SEK 1.3 billion annually in R&D. They have managed to commercialize inventions like DuraSense, a biocomposite, Lineo, a renewable replacement for oil-based phenolic materials, as well as kraft lignin production and they run three MFC plants. Four universities in Sweden and Finland are strategic partners and the company has also partnered with research initiatives Wallenberg Wood Science Centre and Treesearch.
Finding and acquiring new partners
Integration forward in value chains is not a new phenomenon and paper companies have bought and invested in production of corrugated board and sacks, i.e. in already existing and well established businesses. However, we are now seeing paper companies entering start-up and development companies as part or full owners contributing with competence and money to develop totally new products, often replacing existing fossil based products or old technologies.
Tree to textile is a Swedish development company owned by Kiram, a Swedish innovation company, H&M and IKEA and with a technology to produce textile fibres from cellulose without using harmful chemicals. According to their Annual Report 2017 ”textile material as linen and T-shirts have been produced and comprehensive textile property tests have been done with good results”. At the end of 2018 Stora Enso joined “Tree to textile” as part owner and the ambition is to build a demonstration plant at one of Stora Enso’s Nordic sites. During 2018 Stora Enso joined Sulapac, a start-up company developing biodegradable and renewable drinking straws, and acquired Cellutech, a company developing new material and applications based on cellulose, MFC and other wood based components.
Another example is BillerudKorsnäs Venture, a wholly-owned subsidiary of BillerudKorsnäs, partnering with visionary entrepreneurs looking to define the future of packaging. The company seeks innovative packaging-related solutions with emphasis on paper bottles, cold chain solutions and internet of packaging.
Their present portfolio consists of investments in five companies. BioBag produces biodegradable bio-plastic bags and Danish EcoXpac develops paper-based bottles for carbonated drinks. UK-based HanHaa’s solution enables the condition and position of parcels to be determined in real time during the delivery process while Norwegian Kezzler is global leader in technology for assigning unique digital identities for individual packaging. The Californian Vericool focuses on solutions enabling sustainable and compostable packaging solutions for unbroken cold chains in the grocery and pharmaceutical market.
Many interesting things are going on and I will in coming blogs dig deeper into issues like innovative products, key innovation players in Sweden and Finland, digitalization of the industry etc. In spite of a strong focus still on today’s bread and butter products and processes there are, fueled by market trends and sustainability matters, many things brewing in the industry kettles.