Eureka 429: Material progress

0:15You're listening to Eureka on Monocle Radio, brought to you by the team behind the entrepreneurs, the show all about inspiring people, innovative companies and fresh ideas in global business. I'm Tom Edwards. The Helsinki-based forestry company Stora Enzo traces its roots all the way back to the 13th century and today employs over 20 ,000 people in more than 30 countries. The key to its success? Perhaps the ability to adapt to changes in the economy by a series of pivots, the latest of which from paper to biomaterials. Monocle's Helsinki correspondent Petri Bertsov met Stora Enso CEO Hans Sahlström at the company's new landmark headquarters, the building itself a statement about the potential of forests.

1:29STURA ENSO The imposing building is a prominent feature in the Helsinki skyline and underscores both Sturaenso's importance to the Finnish economy as well as the enduring appeal of the material that has kept the company in business for more than seven centuries. In its heyday, Sturaenso was the world's largest pulp and paper producer, but as the demand for paper dipped, the company made the pivot from paper to packaging and then to other wood-based products. The CEO Hans Sülström refers to Stora Enso as a renewable materials business when he recounts the company's storied past. Yes, in fact, Stora Enso is the world's oldest still existing limited company from dating back to 1288.

2:18So we have an over 700 year of history. And during that time, of course, Stora Enso has showed its capability to renew itself, to change. And now, as the renewable materials company, we are very much looking into new wood-based materials. So innovative materials going into batteries, for instance, based on wood, is some of the new innovations we have in our portfolio, combined with, for instance, new type of wooden construction materials, which makes it not only more sustainable to build out of wood, but also So, you know, quicker, more cost efficient and then, of course, renewable packaging to replace plastics and other fossil packaging materials.

3:05So all our businesses are driven by strong sustainability trends. Despite its pivot away from paper, Sturajenso remains Europe's second largest producer of paper. With the price of paper at a historic high and the demand for paper dipping, it would be easy to say, as in fact many naysayers do, that the days are numbered for paper and the printed page. Sulström believes, however, that paper is not going anywhere. I think there is absolutely a great future for print media, but in very specialized segments. Like Monocle is a great example of a high-end specialized special interest magazine. and with all the digitalization, with all the information flow in a digital form, I think there is a more natural also place for print media, but in the specialized special interest magazine sector.

4:10With the growth of online retail and next day deliveries, the demand for packaging shows no signs of slowing down. But Stura Enso, perhaps following its long experience of adapting to the changing world, is wary of not having all of its eggs in one basket. The company believes that wood from responsibly managed forests can be used to make not only cardboard packaging, but also many of the products that we use daily, such as plates, mugs, cosmetics containers, hygiene products and even cleaning products. Where does Sulström see most untapped potential? He begins his answer by pointing at his surroundings in the new head office.

4:53Well, there is a great untapped potential in wood construction and this is a great example. It's the largest massive timber construction in our country today. and a fact is that in the European Union less than 3 % of the used construction materials is renewable wood and 97 % fossil. As said, in this construction we tie up 6 ,000 tonnes of carbon for a very long period of time so wood construction can actually be a part of the climate solution, a very important part. And then of course the renewable packaging sector. There is a strong drive to replace plastics, to get rid of the microplastics in nature, the plastics in the ocean.

5:40And the way to do it is really to move into renewable, recyclable and biodegradable wood-based packaging materials. Suoström has worked in the forestry sector for almost three decades, first running paper mills and then entire paper businesses. When he speaks of the potential of wood, the enthusiasm is palpable. Growing up in a country where more than three quarters of the land area is covered with forests, Sultröm's relationship to trees and nature, like that of most of his countrymen, is close and personal. When he talks of sustainability and doing good for the planet, he means it, and these are more than just buzzwords to him.

6:24For Stora Enso, a healthy planet means a healthy business.

6:54as well as also biodiversity. And we strongly believe that with technology, with digitalization, with artificial intelligence applications, you can combine a better biodiversity, a better environmental-friendly approach and positive impact on nature with forestry. Paper is an emotional subject to most Finns. Finland is a country that has always lived off of its forests and it was wood pulp and paper that lifted entire generations out of poverty in the aftermath of the second world war there was a time not long ago when the forestry sector accounted for 95 percent of Finland's export earnings today it's much less than that and technology and services now account for most of Finland's economic output.

7:48But forests are still important. Paper is not going anywhere and the need for packaging will continue to grow. And Stura Enzo's innovations are paving the way for a new forestry economy, as the company's ambitious credo suggests. Everything that is made from fossil-based materials today can be made from a tree tomorrow. For Monocle in Helsinki, I'm Petri Burtsov.

8:41Laura Kramer with audio editing by Jack Dewars. Listen again and find out more at monocle.com or follow us wherever you get your podcasts. To contact the team, do email Laura on lrk at monocle.com. I'm Tom Edwards. Goodbye, and thanks for listening to Eureka.