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On February 21st, 2000 I was moderating a panel discussion in Stockholm and the theme was: The IT society, a threat against printing paper?

Starting up the panel discussion, I reminded the audience that there was an Internet company traded on NASDAQ called Amazon that had 3,000 employees, negative profits, and a market cap of 8 Billion US dollars. This was equivalent to the market cap of SCA, Stora, Enso, UPM and Holmen – COMBINED. Most people in the audience laughed and exclaimed that the world had gone crazy. Not so many are laughing today. Since then Amazon’s stock price has soared by over 2100% and the market cap is now 700 billion US dollars. What about the named forest industry stocks? Well, they have risen too and are today valued at 60 billion US dollars. With Amazon´s market cap outperforming the selected basket of forest industry stocks 12 fold, we can conclude that at half-time it’s 1-0 to Amazon.

However, the game isn’t over until the referee blows the whistle. What will happen in the next 18 years? Today the forest industry is in much better shape than in 2000. Their business models are supported by mega trends such as increasing e-commerce, aging population, growing middle class, a world going non-plastic, etc. The industry is optimistic about the future, with many new ideas and innovations in the making. In the second half of the game my bet would be to go long in forestry and short in Amazon.

We see these trends, with all the new opportunities they offer for the forestry industry. And we’ll take an active role in this process of change. Because we help create value for companies around the world by transforming data and knowledge into strategic advice and efficient communication.

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Tenarguments

You can’t see the forest for all the trees”.

In Sweden, with some 80 percent of the land covered by forests, that is a pretty obvious remark. But it is also a Swedish proverb, meaning that it’s hard to see what’s under your nose.

Maybe that is also the case when it comes to the nature of the forestry industry, especially the pulp industry. Things are changing, fast. And few see it. From being the archetypical cyclic industry, ridden by regular financial tidal waves, the forest industry is showing signs of increased stability over time.

 

Let’s list the indicators, one by one, but without any internal order:

  1. Forest land gets a higher evaluation than ever by analysts and is seen as a safe investment.
  2. Printing paper represent a much smaller share of the business now, and hence a much lower implication on the bottom line.
  3. The population in the industrialized world is getting significantly older, which implicates an increased use of tissue products, not least for incontinence care.
  4. Globally, a larger proportion of the population is rising from poverty, and therefore is likely to consume more paper based products.
  5. The growth in the global economy shows surprising stamina, which in turn drives the demand on packaging.
  6. Consumers are becoming more environmentally concerned, and show a growing resentment against plastics and pro paper based packaging.
  7. The shift from a fossil-based to a bio-based society is growing and becoming common practise.
  8. There is a growing lack of recycled fibre in the recycling system, which drives a need to invest in the production of fresh fibre.
  9. The forestry industry, which may have been seen as conservative, is becoming more and more innovative, focusing increasingly on R&D.
  10. After years of development, large scale wooden based buildings (residential as well as commercial) are getting a broader acceptance.

 

We see these trends, with all the new opportunities they offer for the forestry industry. And we’ll take an active role in this process of change. Because we help create value for companies around the world by transforming data and knowledge into strategic advice and efficient communication.

 

 

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C_Future_Lab

In 2013, Stora Enso approached us at Opticom International Research with one particularly interesting project: their VOICE customer loyalty research programme; and when the Renewable Packaging Division decided to entrust us with interacting on a daily-basis with their customers it became the start of a long-term partnership. This project has been growing over the years and is now running over 80 countries worldwide.

John McKechie – Vice President, Customer & Sales Support at Stora Enso – gives us his views on these first years of cooperation.

jmck photo 20100924
John McKechie
VP, Customer & Sales Support
Stora Enso
Stora Enso decided to implement a customer experience project to obtain measurable and actionable feedback from their customers in order to better understand the areas of improvement; but also where they are doing well. As Opticom International Research worked with Stora Enso over many years conducting varied surveys and research projects on our behalf: it was a logical partnership for the VOICE program.

When asked about what the project means to Stora Enso and which part is the most valuable, John answers, “VOICE is increasingly important to the company. We need to have a consistent way to measure our customers’ experience, which also gives us impartial and detailed feedback. VOICE does not give us all the answers, but it does clearly indicate to us where we need to take improvement actions. The trend analysis also shows how we are viewed by our customers in comparison to our competition.”

More than just providing feedback and data, the programme can lead to making specific business decisions. John explains, “Many of the decisions we make might be relatively minor, specifically taken to address an issue raised by a customer e.g. changing the production order on a machine to reduce lead times. However, larger systemic issues are highlighted and this has led, for example, to significant reviews being made of our supply chain to address low scoring when it comes to delivery reliability, delivery consistency and delivery times.” And these decisions are leading to the improvement of Stora Enso’s processes and services.

John brings forward the advantages of working with a third party: “Opticom are experts in the research field and, although you are clearly communicated to our customers as being our partner in this process, you are still perceived as being independent. This allows us to get impartial, honest and detailed feedback from our customers which we would not be able to do if we conducted the interviews internally.”

Today communication is the cornerstone of any businesses and we – at Opticom – are eager to understand how our clients communicate about researches and their results. John shares that he himself communicates about the VOICE programme internally. He adds, “Within our Divisions there is regular communication of VOICE results and VOICE is on the agenda of Management Team meetings down through the organisation structure. VOICE is also a regular feature of the CEO’s monthly All Employee Call. Occasional articles will also appear in internal publications.”

John concludes his testimonial by highlighting that “the project ensures that we get regular, impartial feedback and meaningful detailed verbatim. As the interviews are conducted externally, there is a stronger belief in the accuracy of the scores and the honesty of the comments from our customers.”

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