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Global procurement strategy at METSÄ TISSUE SA – part 1

March 2, 2007 | Redakcja

Metsä Tissue is one of the leading manufacturers of tissue paper products in Europe. The group was founded in Finland, and its origins date back to 1868. It owns paper mills in its native Finland (1 mill), as well as in Sweden (2 mills), Germany (3 mills), and Poland (2 mills, accounting for 30% of the entire production potential in the country). The company also operates sales offices in Denmark, Norway, Switzerland, France, and the United Kingdom.
As of the end of 2002, Metsä Tissue, part of the M-real and Metsalitto Group, employed approximately 3,300 people, and its turnover amounted to 647 million PLN.
The Metsä Tissue Group is involved in the production, sales, and marketing of tissue paper products in the following market segments:
• consumer
• Away-from-Home (AFH) customers
• tableware
• paper products for baking and food preparation, with the main brands being Lambi, Serla, Leni, Mola, Alfa, Katrin, Saga, and Fasana.

It should be noted that the value of the tissue paper market in Poland in 2002 was 730 million PLN, which was 1.5 times larger than the deodorant market and twice as large as the shampoo market. Due to the increase in the consumption of higher-quality paper, it is estimated that their share in tissue paper sales will rise to 65% in 2003.

The company’s main market area is Europe north of the Alps. The company is a leading manufacturer of tissue paper products in the Scandinavian market and the fourth-largest supplier of tissue paper in Europe.

In Poland, the company began operations in 1998 by acquiring shares in the Warsaw Paper Mill in Konstancin-Jeziorna, one of the oldest paper mills in Europe and Poland (founded in 1760). The company’s ambition is to achieve the position of a leading European enterprise in the tissue paper industry in selected European markets, in the area north of the Alps, which covers over 200 million consumers. This goal is to be achieved through, among other things, a series of investment and development programs, for which 90 million euros have been allocated. One such program is the global procurement strategy at Metsä Tissue SA presented in this article.

The concentration of suppliers of raw materials, materials, and services for paper mills means that Metsä Tissue is dealing with increasingly larger companies – suppliers whose ability to dictate both prices and delivery terms is growing, and the scale of purchases is, for example, in Poland alone:
• purchases of transport services for domestic distribution only (excluding international deliveries and rail deliveries) at a level of approx. 20 trucks with the maximum permissible load capacity per day
• purchases of 7,000 tons of waste paper per month
• purchases of 60 tons of packaging film per month.
The article comes from the magazine “Logistyka” 4/2004.

L2004-4s59.pdf