Metso begin global efficiency programme

Programme expected to yield annual savings of around €100 million following demerger

METSO have embarked upon a global efficiency programme that will cover their continuing operations following demerger of the company’s pulp, paper and power businesses into a new independent listed company, Valmet Corp, in January 2014.

The programme is designed to improve Metso’s cost structure and operational efficiency and is expected to yield annual savings of around €100 million in operational costs by the end of 2015.

According to Metso’s president and chief executive officer, Matti Kähkönen (pictured), the efficiency improvements are needed to secure Metso’s competitiveness going forward.

‘This programme is part of our continuous efforts to improve Metso’s productivity and maintain the competitiveness of our businesses in today’s volatile market environment,’ he explained. ‘In preparation for the demerger, we are reviewing our overall cost structure to ensure its viability in helping Metso succeed even better in future.’

Actions being taken under the programme, which are expected to affect personnel and locations worldwide and target cost savings of around €60–80 million, include:

• Divestment of parts of industrial conveyor belt manufacturing and related sales and services operations in Northern Europe, with a total of 340 employees to be transferred to the buyers of these operations after closing.
• Employee negotiations to study the future of the foundry operations and machining workshop in Tampere, Finland. Final measures (temporary lay-offs, permanent reductions, transfers, divestments etc) will be decided in the negotiations covering a total of 240 employees.
• Restructuring of Metso’s Europe, Middle East and Africa (EMEA) organization.
• Transfers or closures of small local operations and streamlining of organizations.
• A programme to improve the efficiency of Metso’s global procurement activities.

Metso say their new strategy calls for a more integrated Group and, as a result, all support functions have been reorganized to match this strategic goal, the target being to improve the efficiency of these functions while simplifying processes and cutting costs.

Moreover, as part of support function integration, a number of tasks from the segments will be incorporated into Metso Group, while at the same time the company’s head office will be resized to match the needs of Metso following the demerger.