Sustainable Finnish forestry showed its attractiveness as Itochu Corporation, one of the largest trading companies in Japan, invested 472 million euro in the Finnish pulp producer Metsä Fibre. The investment secures sustainable supply of northern softwood for Itochu, and brings about new opportunities in the growing Asian market for Metsä Fibre.
Pulp may pop up anywhere: enjoy a nice cup of coffee from a paper coffee cup, read your favorite magazine, pick some sweet chocolate from a paper box and use a beautiful serviette, and you have already encountered pulp several times. Pulp is also the keyword in one of the biggest recent foreign investments in Finland. Itochu acquired a 24.9 percent strategic stake in Metsä Fibre, one of the leading pulp suppliers globally.
Through the investment, Itochu and Metsä Fibre, partners for decades already, will enhance their co-operation and pursue remarkable synergies in the spirit of sampo yoshi, one of Itochu’s central values. Sampo yoshi is Japanese and translates as good for the seller, good for the buyer, and good for society.
Reliable supply as Finland’s advantage
Itochu did not invest in Metsä Fibre, based in Espoo in the Greater Helsinki area and with pulp mills in Joutseno, Kemi, Rauma and Äänekoski, by coincidence. The company sees sustainability of both forestry and supply as a critical issue – and as something that the Finnish company Metsä Fibre can reliably offer.
As global demand for paper rises constantly, the main raw material, northern softwood, is a scarce resource, but Metsä Fibre is highly cost-competitive as it receives stable raw material supplies from Metsä Group and its parent company Metsäliitto Cooperative which own abundant, high-quality Finnish forest resources. Pulp supply of constant quality exactly at the agreed time is a point of honour with Metsä Fibre. The investment secures Itochu’s leading global position in pulp trading.
Softwood to the East, hardwood to the West
At the same time, the parties entered into a commercial arrangement whereby Itochu’s sales agent position in selling Metsä Fibre’s long fibre pulp – from coniferous trees – in Asia and Metsä Fibre’s sales agent position in selling Itochu’s short fibre pulp – from deciduous trees – in Europe will be renewed. This arrangement brings for both Itochu and Metsä Fibre the opportunity to create more value and stability.
Metsä Fibre, founded in 1973, is a subsidiary of Metsä Group which produces high-quality products mainly from renewable Nordic wood. Metsä Fibre has four pulp mills in Finland with an annual production capacity of 2.4 million tons. Itochu is one of the largest trading companies in Japan with approximately 130 bases in different industries in close to 70 countries.