Metso Oyj history, profile and corporate video
Metso Oyj is a global supplier of technology and services in the process industries, including mining, construction, recycling, pulp and paper, power and oil and gas. The company operates its business through the following segments: Mining and Construction, Automation, Pulp, Paper and Power. The Mining and Construction segment supplies technology, processes, machinery and services for aggregates production, construction, mining and minerals processing. This segment is organized in three business lines: Minerals Processing Systems, Crushing and Screening Equipment as well as Services. The Automation segment supplies process industry flow control solutions, automation and information management systems and applications and services. The Automation comprises three business lines: Flow Control, Process Automation Systems and Services. The Pulp, Paper and Power segment supplies processes, machinery, equipment, services, paper machine clothing and filter fabrics for the pulp, paper and power industries. This segment is organized in four business lines: Paper, Fiber, Power and Services. Metso was founded in 1999 and is headquartered in Helsinki, Finland.“
Even though Metso Group is still relatively young, its roots date back to the 1750s in Helsinki, where a small shipyard in Suomenlinna operated in the 1900s. In the 1900s the shipyard was transferred as part of Valmet to the ownership of the State of Finland. Tamfelt which was acquired in 2009 was also founded in the 1700s.
Metso was created on July 1, 1999 through the merger of Valmet, a paper and board machine supplier, and Rauma, which focused on fiber technology, rock crushing and flow control solutions.
In 1998 Rauma’s businesses included:
- Timberjack forest machines
- Sunds Defibrator fiber technology equipment
- Nordberg rock crushers
- Neles Controls valve-control systems
The new company had overlapping operations and to some extent the same customer base too. The purpose of the merger was the will to grow particularly in process technology. For a bigger company it seemed to be easier to survive better in international markets. The company’s scope of business became more diversified than before and there were critics of the merger saying that easier growth would have been achieved if the two companies would have each acquired a competitor in their own core business sector.
The new company had offices in 50 countries and 32,000 employees after a personnel reduction of 2,000 people, and it operated in four sectors:
- Paper machines
- Forest machines (divested in 2001)
- Fiber technology
- Rock crushing plants
The name for the new company was sought in an employee contest. There were 3 suggestions for the name Metso among the total 6 500 suggestions. All the three who had suggested the name Metso received a monetary prize. Metso is the Finnish word for Wood Grouse, also known as The Western Capercaillie (Tetrao urogallus), Heather Cock or Capercaillie. Wood Grouse is found across Europe lives e.g. in Finnish pine forests. Metso’s logo mimics the shape of the wings of a Wood Grouse.
Sundberg and Hakala did not stay that long in Metso’s management. Tor Bergman became the new President and CEO in 2001. In 2001, Metso’s net sales were EUR 4.7 billion, and it had 28,500 employees.
The new Metso Group was divided into three business areas:
- Fiber and Paper Technology
- Automation and Control Technology
The merger of Valmet and Rauma had given direction to the company’s future focus on
- Pulp, paper and energy production technologies
- Equipment needed for the construction, mining and recycling industries
- Automation and control systems for the process industry
This formed Metso’s three main business areas:
- Metso Paper
- Metso Minerals
- Metso Automation
The aim of the plethora of business acquisitions made in the 2000s was to expand the product and services portfolio of Metso Paper and Metso Automation. Business operations outside the core businesses were divested. For example, in 2000, Metso acquired the roll cover business and paper machine servicing operations, including paper machine technologies, from the American paper machine manufacturer Beloit (corporation), and the American John Deere aka Deere & Company acquired the forest machine manufacturer Timberjack from Metso. In 2001, Metso acquired the Swedish Svedala Industri AB, a manufacturer of rock and minerals processing equipment.
In 2002, Metso announced that it would not achieve its profit targets for two years, and a loss in excess of EUR 300 million was recorded for July–September. The reason for difficulties was Svedala. In 2003, a loss of over EUR 200 million was recorded and in September 2003, President and CEO Bergman was forced to resign because of the company’s poor results. Jorma Eloranta was selected as Bergman’s successor. He started in March 2004.
Between 2004 and 2007, Metso’s net sales increased from EUR 3.6 billion to EUR 6.3 billion, and the profit margin rose from 5.5 percent to 9.3 percent.
During Eloranta’s tenure, Metso increased its net sales and improved its financial performance for 19 consecutive quarters (2004-2008). By 2008, Metso had grown to become Finland’s ninth largest company, surpassing other engineering companies like Kone, Wärtsilä and Cargotec.
Metso’s business functions had divided into three sectors (Metso Paper, Metso Minerals and Metso Automation) with over 28,000 employees and net sales of EUR 6.4 billion. In fact, at that point, it was Metso’s best year ever in terms of operating profit and net sales, but the rapidly weakened market situation in the second half of the year forced Metso to initiate sizable measures to adjust its operations.
By 2008, Metso had become Finland’s ninth largest company and the number of Metso shareholders had increased from 25,000 to 42,000. Metso strengthened its market position and service capacity in growing markets, particularly in India and China. During 2008, the expansions to the Ahmedabad foundry and the Bawal factory in India were completed.
Metso also purchased the paper machine technology of Japanese Mitsubishi Heavy Industries’ (MHI), making Metso the sole owner of Beloit’s paper machinery intellectual property globally.
In September 2008, Metso sold 83% of its foundry in Sweden to an investment group assembled by the Primaca investment company. The Metso Foundries Karlstad unit specialized in casts of wind power components, diesel engine blocks and Yankee cylinders for paper machines.
By 2009, half of Metso’s orders received in 2009 came from emerging markets, compared to less than one fifth in 1999. In the same year, Metso entered into a combination agreement with Tamfelt, one of the world’s leading suppliers of technical textile. Subsequently, Metso made a public exchange offer for all of Tamfelt’s shares.
In the first half of 2009, Metso laid off over 700 employees and shut down several small units in e.g. Tampere, Turku, Oulu and Hollola. The operations of the shut-down units were integrated with the Järvenpää and Jyväskylä units. Metso’s strategy for the 2000s was to manufacture wide, high-speed paper machines and discontinue its traditional paper machine concepts.
Matti Kähkönen was appointed the new President and CEO of Metso Corporation on March 1, 2011. Previously, Kähkönen had headed Metso’s Mining and Construction segment. Despite the global economic uncertainty, Metso’s profitability grew steadily in 2011. The services business, with a value of over three billion euros, accounted for about 40 percent of orders received in 2011.
Metso opened new plant and office facility for valve, positioned and actuator manufacturing, R&D, customer training and local services in Vantaa, Finland. The lay of the new factory is based on Lean manufacturing model. The new facility replaced the operation premises in Roihupelto industry area in Helsinki where the company was producing valves for nearly 50 years.
In August, Metso acquired the mining services business of Copperstate Industrial Services, based in Arizona, USA. The acquired business aimed to strengthen Metso’s position as a leading service and technology provider for the mining industry in North America and Mexico.
In August 2011, Metso entered into a joint venture agreement with the Chinese SAC, Guodian Nanjing Automation to support Metso’s strategy in the power automation control systems market in China. In December 2011, Metso sold its workshop in Valkeakoski, Finland, with all related equipment and screen basket manufacturing.
In September 2012, Metso announced the need for a personnel reduction of more than 600 Finnish employees in several of its business units serving the paper industry and paper production. The reason for the reductions is structural change in the industry and due to that the weakening of paper business unit’s competitiveness and profitability: competition has increased, demand for paper machine and foundry products has weakened. Customers want cheaper solutions than before. Metso had planned to give extra dividend for its shareholders but after the decision of paying dividends while cutting staff was criticized e.g. by personnel and the Finnish politics the decision was cancelled.
In November 2012, Metso agreed to form a joint venture with China’s LiuGong Group to develop the track-mounted crushing business in China. Also in November, Metso acquired 75 percent of Shaorui Heavy Industries, one of China’s leading mid-market crushing and screening equipment producers.
Metso also entered new markets with the acquisition of the South Korean valve manufacturer Valstone Control Inc. Additionally, Metso consolidated its valve operations in the United States into new premises in Massachusetts and opened a new valve supply and service center in Vadodara, India.
In December 2012 Metso closed the acquisition of U.S. software company ExperTune Inc. ExperTune’s products are widely used as software tools to analyze and monitor the performance of industrial processes and to identify the associated maintenance and improvement opportunities.
In August 2013, Metso closed the acquisition of Chinese manganese steel foundry JX. The acquisition improved Metso’s ability to supply wear parts to the mining and construction industry in China.
2013 company demerge
On October 1, 2013, the Extraordinary General Meeting approved the demerger of Metso into two companies. At the start of 2014, Metso Corporation’s Mining and Construction business and Automation business formed the new Metso Corporation and Metso’s Pulp, Paper and Power business formed a new independent company under the name Valmet Corporation.
In December 2013 Metso reduced its holding in Valmet Automotive to approximately 41%. This arrangement ceased Valmet Automotive as a Metso subsidiary.”
On 30 June 2020, Metso’s partial demerger and combination of Metso Minerals business unit and Outotec took place. Two new companies started operations 1 July 2020: Neles and Metso Outotec.
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “Metso Outotec“