Valmet's Strategic Shift: Enhancing Customer Lifecycle Experience

Valmet's New Strategic Direction for Enhanced Customer Service

Valmet Oyj is embarking on an ambitious journey to revamp its operational strategy, with a primary focus on serving customers more effectively through a lifecycle approach. This strategic shift was laid out during their recent Financial Statements Review, as the company seeks to identify growth areas, expand its business operations, and enhance organizational efficiency to better align with market demands.

Over the years, Valmet has demonstrated resilience, continually reinventing itself to adapt to industry changes. With over 225 years of experience, the company has achieved notable milestones, establishing itself as a global leader in technology across sectors. In doing so, Valmet has expanded its operations through both organic growth and acquisitions, positioning itself strategically for the next phase of development.

The Vision Behind the New Operating Model

Valmet’s proposed operating model is aimed at maximizing customer value throughout the lifecycle of their equipment. Central to this approach is the formation of distinct business areas focused on both capital equipment and aftermarket services. These business areas will include: Automation Solutions, Flow Control, Pulp, Energy and Circularity, Packaging and Paper, and Tissue.

This intended restructuring will enable Valmet to optimize resource allocation, clarify roles and responsibilities, and expedite decision-making processes. By consolidating its existing geographical operations into these well-defined business areas, Valmet aims to bring local expertise closer to the core business functions.

Supporting Global Operations

To ensure efficient execution, Valmet also plans to establish a dedicated Global Supply unit. This unit will play a crucial role in enhancing cost-competitiveness by optimizing procurement and production strategies on a global scale. The streamlined operating structure will encompass other essential functions, including People, Communications and Culture, Finance, Strategy and Transformation, and Legal.

Projected Impacts and Transition Plan

Valmet foresees that this new operating model could lead to a maximum reduction of up to 1,150 roles out of its existing workforce of over 19,000 employees globally. These changes will primarily impact white-collar positions, with notable reductions expected in various locations, particularly within Finland.

The anticipated cost savings from these changes are estimated to reach approximately EUR 80 million annually, anticipated to be fully achieved by early 2026. Although these decisions may pose challenges, they are deemed necessary for the company to thrive in a competitive and evolving market landscape.

Commitment to Employee Engagement

Throughout this transition, Valmet is committed to engaging with its employees and representatives to navigate the negotiation process smoothly. The company aims to maintain transparency by keeping communications open and supportive during this organizational change.

Revamping the Executive Leadership Structure

As part of this transformation, the composition of Valmet's Executive Leadership Team will also undergo revisions, with the new team structure expected to be finalized by mid-2025. The leadership team will include industry veterans, each bringing expertise to their respective areas, which is crucial as Valmet transitions into a new operational phase.

This careful restructuring ensures that Valmet continues to drive innovation and quality in its operations while addressing any potential challenges associated with the changes.

Looking Ahead: The Future of Valmet

Valmet's management team recognizes the complexities involved in the proposed changes but remains optimistic about the strategic path forward. Continuous improvements in efficiency are critical, particularly as market activity in the pulp and paper sector reflects a downturn.

Upcoming communications regarding the renewed strategy and operating model are expected to be shared with stakeholders around the time of the planned Capital Markets Day. This will mark a significant milestone for Valmet as it outlines its strategies to navigate challenges and seize new opportunities.

Frequently Asked Questions

What prompted Valmet to renew its operating model?

Valmet is renewing its operating model to enhance efficiency and better serve customers through a lifecycle approach while adapting to market conditions.

How many jobs might be affected by the proposed changes?

The proposed changes could affect up to 1,150 roles globally, primarily among white-collar employees.

What are the projections regarding cost savings?

Valmet anticipates annual cost savings of approximately EUR 80 million from the restructuring efforts.

What will be the new organizational structure at Valmet?

The new structure will feature distinct business areas dedicated to capital equipment and aftermarket services, enhancing customer value through focused expertise.

When will the new operating model take effect?

The new operating model is planned to be effective as of July 1, 2025.

About The Author

Greetings, I'm 32-year-old author and financial specialist Evelyn Baker. My introduction into the financial industry started with an economics degree and continued with a wealth of experience in wealth management and financial consulting. My great passion over the years has been assisting people and companies in making wise, well-informed decisions to reach their financial objectives.

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