A business view on Baltic Sea Region eastwest trade routes

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A business view on Baltic Sea Region
east-west trade routes

• - a presentation at BalticTangent Mid-term
  conference in Kalmar, February 9-10, 2006

Gustav Tibblin Director Business
Development Södra Cell AB
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Content

• The Södra group
• A Södra perspective on BSR
• Business logics
• Inbound logistics
• Outbound logistics
• How to improve competitive power in the BSR

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Welcome to Södra
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Södra facts

• Net sales 1 500 M Euro
• 3,600 employees
• Owned by 35,000 forest owners
• Members forest land 2,1 mill ha

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Forestry operations

• Wood deliveries
• 14.5 mill m3fub
• Wood consumption
• 15.5 mill m3fub

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Industrial operations

• Pulp mills
• Sawmills
• Interior wood production
• Pellets factory
• Ports

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Industrial production

• Pulp 2 million tonnes per yearThe second
  largest pulp producer of market pulp in the world
• Sawn timber 1.4 million m3 per yearOne of
  Europes leading suppliers of construction
  timber
• Interior wood products Net sales 50 M Euro.
  Leading position in Sweden and Norway
• Biofuels Deliveries 2.6 million m3s per year.
  One of Swedens largest bioenergy companies

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The Mönsterås Mill
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Södra - a growing and profitable company

• Sales

Profit after financial items (EBT)
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Content

• The Södra group
• A Södra perspective on BSR
• Business logics
• Inbound logistics
• Outbound logistics
• How to improve competitive power in the BSR

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Business logics forest industry logistics
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Main pulp markets Bleached market kraft pulp
Europe
North America
Asia
19.2 million tonnes 45
7.6 million tonnes 18
14 million tonnes 32
Total deliveries 2004 43,1 milljon tonnes
Source EPIS
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Declining real prices The real price of pulp is
declining by 1,5 annually
Price bleached softwood pulp 1975-2005, SEK/ton
Deflator PPI for Sweden Average1999100
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Content

• The Södra group
• A Södra perspective on BSR
• Business logics
• Inbound logistics
• Outbound logistics
• How to improve competitive power in the BSR

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Inbound logistics wood, destinations, m3sub
Tofte 1 000 000

• Mönsterås and Tofte are industry ports.
• These are more cost efficient
• Hence the large volumes

Varberg 120 000
Mönsterås 1 150 000
Stilleryd220 000
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Content

• The Södra group
• A Södra perspective on BSR
• Business logics
• Inbound logistics
• Outbound logistics
• How to improve competitive power in the BSR

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Outbound logistics, pulp, origin

• Value of industry port 4 Euro/ton outbound
  logistics
• The value is even higher on the inbound side
• In total the value of an industry port is gt15
  Euro/ton

400 000 tonnes
385 000 tonnes
750 000 tonnes
420 000 tonnes
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Outbound logistics, destinations, MEUR
GB 120
USA 20
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Rest of Europe 130
Asia 110
50
210
50
Sw30
50
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The Mönsterås Port a private industry port
Shipments of Pulp 485 000 tonnes 185 ships
pa Pellets 34 000 tonnes 18 ships pa Sawn
timber 57 000 m3 17 ships pa 1150
containers 43 ships pa
Discharge of Pulpwood 1 100 000 m3 362 ships
pa Sodium hydroxide 39 000 tonnes 9 ships pa
2005 total of 1,9 million tonnes handled gods on
596 ships
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Content

• The Södra group
• A Södra perspective on BSR
• Business logics
• Inbound logistics
• Outbound logistics
• How to improve competitive power in the BSR

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Competitive power

• The forest industry is an important sector for
  the BSR
• Competitive logistics are vital for the BSR
  forestry industry
• Efficient transports of pulpwood east west
• Efficient transports of manufactured goods to
  Europe, Asia and USA
• How to improve Forest industry competitive power
  in the BSR
• Infrastructural investments in road system
• Increase of maximum truck weight (eg. Sweden 60
  ton, Estonia Latvia 40 ton)
• Increase of port draughts (icegoing ships from
  Baltic states)
• New industry ports at Mörrum Värö
• Breakup of port monopolies at all ports