fighting medical residue


K E M I R A
S T A K E H O L D E R
M A G A Z I N E
3 / 2 0 1 0
making
waves
to save the Baltic Sea
adding
value
& how to do it
better than others
drugs & water
fighting
medical
residue
REACH has a
role for Kemira
3 | 2010 waterlink
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COnTenTS
4 LINK IT
26
The latest news from Kemira.
11 ProfILe
presenting Waterlink’s columnist,
international author and thinker Dan
Steinbock.
12 addINg vaLue:
a movINg TargeT
a company’s offering must not only
meet customers’ needs, but do it better
than competitors.
19 sTormy weaTher
Clean drinking water, even in turbulent
conditions.
20 KemIra’s messeNger
We joined leena lie, Vice president of
marketing and Communications, for a
busy day at work.
Kemira has an important role in the
european reaCH process.
26 maKINg waves
The Baltic Sea is in despair. action is
needed - now.
31 CoLumN
The changes in global economics signifies
the start of a new era for the chemicals
industry, too.
32 TargeTINg reaL Needs
Kemira’s new strength additives are great
news for packaging board production.
36 from wasTe To useabLe
ProduCTs
many previously disposable byproducts
can now be made into valuable raw
material.
rami lappalainen
24 regIsTraTIoN rumbLe
20
12
It is critical that
customers perceive
added value.
If they don’t buy
the arguments,
superiority
doesn’t matter.
38 Numbers
Kemira’s key figures and share
price development.
42 amaZINg
2
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GeTTY imaGeS
@ the millennium Science camp.
a new product to dye for.
Say cheese!
waterlink 3 | 2010
7.9.2010 11:00:31
e D i TO r i a l
aDDeD ValUe
fOr CUSTOmerS
anD OWnerS
K
SUSanna KeKKOnen
emira takes pride in providing its customers
with solutions for different water treatment
and reuse needs. This ability is based on our
technology expertise, product portfolio and experience gained through collaboration with customers.
We work globally with nearly 10,000 customers, so
we are able to draw from a vast pool of experiences
when creating new solutions.
In the spring, Kemira launched SWEET, the
Center of Water Efficiency Excellence, which
enables us to generate new expertise. Water treatment combines different methods, such as water
chemistry, biotreatment and equipment technology.
Customers need seamless, full-scale solutions that
are cost-efficient and environmentally sustainable.
Creating value through enhanced efficiency, for
example, requires a comprehensive understanding
of customers’ specific needs and the ability to
combine different technologies.
A company also needs to create value for its
owners, so that the return on investments meets
their expectations. Ownership affects management
and building for the future. Essentially, further
development requires that shareholders, the organization and customers look in the same direction.
Kemira’s ownership structure supports determined
and constistent long-term development for the good
of our shareholders.
Harri Kerminen
President and CEO of Kemira
Waterlink is a magazine
for Kemira’s stakeholders,
published in finnish and
english four times a year.
prODUCTiOn
Sanoma magazines finland
Custom publishing
www.sanomamagazines.fi
pUBliSHer
Kemira Oyj
www.kemira.com
managing editor
Johanna hytönen
editor in Chief
marie Lundgren
tel. +46 42 17 11 19
paper
This magazine is printed on
Galerie art Silk 115 and 200 g/m2.
COVer pHOTOS
rami lappalainen
producers
Kati heikinheimo
anu Piippo
layout
Tomi metsä-heikkilä
GeTTY imaGeS
prinTeD BY
forssan Kirjapaino Oy
iSSn 1797-7738
Please send your feedback to [email protected]
subscriptions and changes of address can be made at:
www.kemira.com/media
3 | 2010 waterlink
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7.9.2010 11:00:35
LINK IT
MedIcaL resIdue
burdeNs waTer
sysTeMs
TeXT Risto Pennanen | PHOTO getty images
T
ens of research groups around the world are investigating
the types of problems medical residue causes for water
systems and people. This research, however, focuses on
industrialized countries.
“Research has not paid equal attention to medicines used
in developing countries. We need more information about
malaria, tuberculosis, AIDS and parasite medications, to name
just a few examples,” says Professor Tuula Tuhkanen from
the department of chemistry and bioengineering of Tampere
University of Technology.
These medications are used in countries with no wastewater or household water treatment. Urine in wastewater
carries medical residue to the environment and back to
household water.
Although the situation is significantly better in industrialized
countries, medical and hygiene product residue must be taken
seriously. In particular, medical residue should be monitored
closely in water systems that receive wastewater and run
through several cities before reaching the sea.
“The United States, for example, has approximately 3,000
registered medical substances. Only some 20 substances, those
with the highest production volumes, are monitored in terms
of residue in water systems. This work is very demanding,
because residue is measured in nanograms per liter,” says Kaj
Jansson, Vice President, R&D and Technology.
In water systems, residue can cause many types of
environmental problems, some of which are still unknown.
These problems may be related to species’ reproduction.
“Medications are only one of the substance groups with
possible residue in household water. The combined effects of
different substances can cause additional problems, because
this may result in tens of compounds,” Tuhkanen points out.
Reducing medicine use would be one step toward
decreasing medical residue. In practice, however, the situation
is developing in the opposite direction. For this reason, the
problem must also be tackled with effective treatment methods
in developing countries. The techniques are numerous, including biodegradable chemicals and advanced oxidation methods.
According to Jansson, the treatment plants presently in use
have not been designed for decomposing medical substances.
They are mainly intended for removing solids, phosphor and
nitrogen, as well as easily biodegradable matter. In other
words, more research and practical testing are still needed. n
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medical substances damage
water systems and, possibly,
human health in countries
with dense populations.
waterlink 3 | 2010
3.9.2010 15:03:10
Many medicines are
water-soluble and
partly require other
treatment methods
than those used for
drinking water.
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LINK IT
SUSaNNa KEKKONEN
KIcK-Off
3+1 QUESTIONS
TO jOhaN gröN, KEmIra’S ExEcUTIvE vIcE PrESIdENT,
r&d aNd TEchNOLOgy
Kemira participates in the
ACQUEAU cluster, which facilitates water technology and
related innovations. Established in May, the ACQUEAU
cluster is part of the Europewide Eureka cooperation network, and aims to generate
water-related research and
development projects enhancing the development of competitive products, processes
and services for the global
market. The purpose is to
award a total of EUR 500
million in funding for joint
research projects over the
next ten years.
1. How does tHe ACQUeAU
ClUster differ from otHer
eUropeAn reseArCH
CollAborAtions?
The ACQUEAU cluster is
a business-driven network,
which doesn’t fund basic research at universities. Instead,
it focuses on applied research
carried out by businesses closer to the customer interface.
2. wHAt Are its foCUs AreAs?
ACQUEAU has five focus areas: low environmental impacts for disinfection and
oxidation, low energy waste-
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A fAsCinAting debAte on water management
issues took place at the Singapore International
Water Week in July. This global platform brought
policymakers, industry leaders, experts and
practitioners together to address challenges,
showcase technologies, discover opportunities and
celebrate achievements in the water world.
The seminar was also the opportunity to
launch Kemira’s research and development
cooperation with Singapore Membrane
Technology Centre at the Nanyang Technological
University (NTU). The two-year project aims to
enhance used water treatment and purification.
water treatment, membrane
technologies, real-time system
management and materials
for pipes and coating.
3. wHo Are tHe members?
More than ten leading European companies in the water
sector have founded the cluster. In addition to large companies, small- and mediumsized enterprises are especially
welcome to join. The authorities from different countries,
such as Tekes, the Finnish
Funding Agency for Technology and Innovation, also have
a forum in ACQUEAU.
+1 How does KemirA benefit
from ACQUeAU?
Through the network, we can
make an impact on the future
direction of water-related research in Europe. ACQUEAU
also offers another road to research funding. The focus areas of the cluster are essential
also in the strategic development at Kemira. n
Kemira Ceo Harri
Kerminen and professor
ng wun Jern of
nanyang technological
University celebrating
the new r&d alliance
formed in singapore.
waterlink 3 | 2010
7.9.2010 11:33:19
fOr cOLLabOraTION
IN SINgaPOrE
The goal is to design a more efficient water production
process with a higher recovery rate, lower energy
consumption and less waste volume. Singapore has strengthened its position as
a “global hydrobub”. In 2006, the Singapore
government identified the environment and water
industry as a strategic key growth area and committed
over EUR 250 million for developing this sector. Over
70 water companies now have regional headquarters,
manufacturing and R&D activities in the country. n
NEw
acQUISITION
IN ThE UK
KemirA Closed A deAl with Albemarle
to acquire the legal entity located
in Teesport, Middlesbrough, United
Kingdom. The negotiations were
completed on July 30, 2010. The main range of Teesport’s
products consists of corrosion inhibitors
and drilling emulsifiers enhancing the
Kemira product offering to the oil
and gas industry in the region. The
acquisition aims to strengthen Kemira’s
position in the region and to accelerate
the introduction of Kemira’s waterfocused strategy.
The location of the facility gives
Kemira advantages in geography,
manufacturing flexibility and a
dedicated operation. The site employs
approximately 30 persons. n
Read more on Kemira’s operations in the
United Kingdom on page 10.
DiD You Know…
that if you compare the volume of
water in the Baltic Sea and in the
Mediterranean to the amount of people
living around the sea (and hence
burdening the water with human
action), there should be twice the
population of the Earth living around
the Mediterranean for it to be under the
same stress as the Baltic Sea!
3 | 2010 waterlink
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7
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LINK IT
OIL SEmINar
STrENgThENEd
cOLLabOraTION
cUSTOmEr
SErvIcE
ShaKE-UP
reClAiming wAste oils generated at oilfields was
one of the challenges discussed at the Oilfield
Separations Seminar, held on June 2, 2010. Kemira’s
Espoo Research Center hosted the seminar in conjunction with the Joint Industrial Program of the
Norwegian University of Science and Technology.
The three-day event attracted about 60 participants from oilfield service and oil producing companies as well as universities.
“For us in the research field, it was very useful
to hear what challenges companies face at oilfields.
This information is crucial for us when developing
new products. The seminar also offered an excellent
opportunity to find new possibilities for collaboration among the participants,” recounts Senior
Research Scientist Susanna Toivonen from Kemira’s
research and development. n
dUring tHe pAst few yeArs,
Kemira has taken important
steps towards centralizing
and, thus, upgrading its customer services. Four new customer service centers in Helsinki, Finland; Helsingborg,
Sweden; Barcelona, Spain;
and Botlek, the Netherlands
now cater to Kemira’s customers across Europe, Russia,
and the Baltic countries.
These new centers are
dedicated to their cause and
take care of everything from
customer contact to transportation. Instead of calling various local offices, customers
in the Netherlands and Germany, for example, can now
call the center in Botlek and
receive swift and efficient service in up to eight different
languages.
According to Jari Grönlund, Vice President of logistics and customer services,
the aim of harmonizing processes in this way is not only
to improve the quality of customer services but also to be
better able to measure it. In
fact, surveys so far have indeed revealed significant improvements.
“And it’s only going to get
better,” says Grönlund. n
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mEET US ON ThE rOad
sept 19 iwA world water Congress, montreal, Canada
sept 28 world dairy expo 2010, madison, wisconsin, UsA
sept 29 food ingredients Asia 2010, Jakarta, indonesia
oct 02
wefteC, new orleans, UsA
oct 04
AoCs 7th world Conference on detergents,
montreux, switzerland
oct 05
Cphi 2010, paris, france
oct 13
57th sepAwA Congress, fulda, germany
oct 15-16 Cleantech finland smart days at shanghai world expo
oct 26
spe russian oil & gas, moscow, russia
oct 27-29 delhi international renewable energy Conference
direC (Cleantech finland exhibition stand)
nov 03
6th international exhibition on water
treatment Chemicals, technologies and Applications,
shanghai, China
nov 08
pap for russia, st. petersburg, russia
nov 09
AneAs, XXiV Annual Convention, mexico City
nov 16
ppi Awards 2010, brussels, belgium
waterlink 3 | 2010
7.9.2010 11:33:22
IN SHORT
flUoresCent
wHitening Agents sold
to CAteC gmbH
Kemira oyj and german Catec
gmbH, financially supported
by fengler beteiligungs gmbH,
have signed a contract, according to which Kemira sells
its global fluorescent whitening Agents (fwAs) business
to Catec. fwAs improve the
whiteness and brightness of
paper. the deal covers a production plant in leverkusen,
germany, the global fwA sales
network and the associated
support functions. the fwA
business and its staff of about
100 persons will be transferred
to the new owner once the
companies have closed the
transaction in August 2010.
the transaction does not
have any significant impact on
Kemira’s financial figures.
ThE maN bEhINd “gräTzEL
cELLS” wINS mILLENNIUm
TEchNOLOgy PrIzE
tHe foUrtH millenniUm Technology Prize
was awarded to Professor of chemical
engineering Michael Grätzel from Switzerland. He has invented and developed dye-sensitized solar cells, known as
Grätzel cells, that reduce the cost of harnessing solar energy.
Artificial photosynthesis, the method created by Grätzel, is a promising alternative to the prevailing silicon-based
solar cell technology. The first consum-
er products based on Grätzel cells are already available on the market. In the future, products based on this innovative
technology may include energy-collecting windows and low-cost solar panels,
to name just a few examples.
The Millennium Technology Prize is
EUR 800,000. Kemira is a cooperation
partner of the Millennium Prize Foundation. n
KemirA’s serViCe
CompAny sold to Coor
serViCe mAnAgement Ab
Kemira oyj and the swedish
company Coor service management Ab agreed on may
21st, 2010 that Kemira sells
its ipos service company to
Coor. ipos (industry park of
sweden Ab) provides its customers maintenance, technical and other services in the
industry park in Helsingborg.
the ipos legal entity and a
staff of about 130 persons
were transferred to Coor on
July 1, 2010.
in Helsingborg, Kemira
produces water treatment
chemicals as well as pulp and
bleaching chemicals. Kemira
will keep ownership of some
of the services and assets
like energy production, harbour and eHsQ services and
procurement of the key raw
materials.
Coor service management
is a leading nordic service
company. n
3 | 2010 waterlink
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9
7.9.2010 11:33:24
LINK IT
maSTErINg ThE maTrIx
on JUly 1, Randy Owens was appointed
as Head of Kemira’s operations in
North America. He now holds this position alongside his role as President for
Kemira’s Oil & Mining segment.
“North America represents 23 percent
of Kemira’s total revenue in 2009. While
the region is considered a mature market
for some industries, our new water strategy presents ample opportunities for profitable growth,” Owens says.
Kemira has more than 30 sites in the
area, including manufacturing, sales, and
logistics terminals. Nearly the full range of
the company’s water chemistry platform
is manufactured in plants throughout the
United States, Mexico and Canada. The
region is also supported by a research and
development center in Atlanta, Georgia.
The product portfolio represents sales in
all three segments; Paper, Oil & Mining,
and Municipal & Industrial.
Following the restructuring of the
business in 2008 to the current business
segments, regional restructuring has followed this year in North America. Kemira
continues the transition to a fully global
company, and the goal is to align the
region according to the segment strategies
and the functional goals of Kemira.”
“I see my role as a conduit to ensure strong cooperation and harmonization between the region, functions and segments. My aim is to assure that regional
needs are addressed and that North America is an integral part of Kemira.”
Owens says Kemira wants to continue
being a great place to work, both professionally and personally. The biggest challenge is simply letting the matrix structure
work to build cohesive global teams. n
PrOdUcTION hUb IN ThE UK
KemirA wAs estAblisHed in the United Kingdom in 1982.
3 FacTS ON THe UK:
• population: 61.7 million
• total area: 244 820 km²
• year of eU entry: 1973
source: eU
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21321645.indd 10
After several divestments and acquisitions – the latest
acquisition taking place in July 2010 – the total UK workforce
now stands at approximately 170 people.
Kemira operates from four main sites, the principle
one being the dry polyacrylamide plant in Bradford.
The ferric sulphate coagulant plant is located in Goole
and the polyaluminium chloride coagulant plant in
Ellesmere Port.
The latest addition is the Teesport facility
in the North-East of England. The main products
manufactured there are corrosion inhibitors and
drilling emulsifiers, enhancing Kemira’s offering
to the oil and gas industry in the region.
Sales from the coagulant plants predominantly
come from the UK municipal and industrial
markets. However, 90 percent of the polymers
produced at the Bradford site are exported globally with
45 percent going to EMEA. In addition, Kemira is the largest supplier of runway de-icing products in the UK. n
waterlink 3 | 2010
7.9.2010 11:33:29
PrOfILE
ThE ShIfT
cONTINUES
In the aftermath of the global recession,
more and more people are asking:
What’s next? WaterLink’s columnist
Dan Steinbock believes we have massive
global changes ahead of us.
TExT sAmi Anteroinen | PhOTO leHtiKUVA
I
”The replacement
of g-7 with
g-20 is the best
indicator of the
changing times.”
nternationally recognized business expert Dr. Dan
Steinbock is known as somewhat of an enfant terrible,
with fresh viewpoints on social and economical
development. He argues that the global economy is still
amid a massive transition.
“In the end, its sources of growth will be more
diversified, and more prosperous.”
Steinbock is an expert on the relationships
between advanced economies and large emerging
economies. Currently, he serves as Research Director of
International Business at the United States-based India,
China and America Institute, and as Senior Fellow at
the China-based Shanghai Institutes for International
Studies.
“New sectors of growth, especially in energy and
sustainability, will take time to materialize. The growth
drivers will be primarily in the large emerging economies
– in China, India, Brazil – and in the East.”
Steinbock notes that the shift of the growth drivers
from the advanced world to the emerging world
precipitated the global crisis – and the fallout from the
crisis will only accelerate this shift.
“The large emerging economies have been driving
global growth since 2007, for the first time in centuries,”
Steinbock points out, citing the replacement of G-7 with
G-20 as the best indicator of the changing times. n
Read more: Dan Steinbock’s column on page 31.
3 | 2010 waterlink
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30 seconds
•Driversofvaluechangeover
time,saysProfessorRamBaliga,
expertintheareasofglobal
managementandstrategic
transformation.Ontheglobalized
market,newcompetitorsare
cominginfromalldirectionswith
nolegacyandafresh,unbiased
perspectiveoncustomervalue.
•Companiesoncefocused
exclusivelyonthetechnicaland
economicaspectsofvalue.But
socialandemotionalaspects
oftenmakethedifference.A
goodproductcanfailbasedon
badexperiencesfromjustafew
customers.
•Baligapositsanewequation
forunderstandingcustomer
value:value+willingnesstopay
+price+cost.Costandprice
arecontrollablevariables.But
willingnesstopayandvalue
aretrickier.Thesamevalue
propositiontovariouscustomer
segmentscouldgeneratedifferent
outcomesinwillingnesstopay.
•Anothercentralconcept
iscustomerexperience
management.Everyencounter
withacustomeratanytime
inanywayisastartingpoint
forsignalingvalue,saysDr.Kaj
StorbackafromHankenSchoolof
EconomicsinHelsinki.
•Customervaluehastwoparts:the
actualexchangevalue,orwhat
thecustomeriswillingtopayand
usevalue,orwhatthecustomer
getsoutoftheofferingasthey
useit,beitaservice,achemical,
orapieceofequipment.
•Companiesshouldstructurethe
offeringsothatcustomerscan
getashareofboththeexchange
valueandtheusevalue.
12
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waterlink3|2010
3.9.2010 15:04:48
teXt Randel Wells|PHOtOSGeTTY IMaGesAndIsTOCKPHOTO
Adding vAlue:
AmOving
TARgET
It is no secret that in order to succeed, a company
must offer products and services that bring value
to customers. The offering must not only meet customers’
needs, but do it better than competitors. »
3|2010waterlink
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3.9.2010 15:04:51
”R
elying on past success
as proof of future success is a big mistake,”
states Ram Baliga,
Professor of Management at Wake Forest University in North
Carolina, expert in the areas of global
management and strategic transformation.
“Companies often fall prey to their own
mantra. They develop a particular solution
or application and begin believing their
offering has some sort of intrinsic value.”
Companies also still look at
value from a very static perspective,
he continues. “They don’t take into
consideration that the drivers of value
change over time.”
The value life cycle is shrinking,
just as product life cycles shrink. Even
developments in cost reduction are
changing so rapidly that a company’s
ability to maintain low cost production
is not guaranteed.
14
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The continued globalization of
economies brings further challenges.
New competitors are coming in from all
directions with no legacy and a fresh,
unbiased perspective on customer value:
“They come to the market with a more
current value proposition,” Baliga says.
“To understand what is valuable to
a customer, one needs to understand
what the customer’s goals are,” adds Dr.
Kaj Storbacka, who presently holds the
chair of Marketing at Hanken School of
Economics in Helsinki and serves as the
chairman of Vectia Ltd., a consultancy
specializing in customer oriented strategy
development, and sales and account
management. “Only if your offering helps
the customer achieve his or her goals will
your offering be of value.”
PERCEPTiOnS
“Companies used to focus exclusively
on the technical and economic aspects of
value. A lot of times where those companies
get beat today are in the social and
emotional aspects of value,” Baliga notes.
Take, for example, the recent case of a new
diaper by Procter & Gamble. The diaper
was demonstrably more effective at keeping
a baby dry compared to other diapers.
However, a few early users experienced
their babies getting rashes from the new
diapers. These customers went on social
networking sites to tell about their experiences. Soon, even though their product was
technically superior, Procter & Gamble
faced many challenges.
On the basis of bad experiences from
just a few customers, a good product can
fail. Even in heavy industry, these soft
aspects of value are becoming more important. Customers are not only interested
in the technical value of a product, but
also in whether the company is easy to do
business with on a person-to-person level.
“Customer value is always a perceived
waterlink3|2010
3.9.2010 15:05:04
value,” Storbacka says. Customers
can perceive things differently than
the provider, so the provider needs to
understand those differences to be able
to make the right offering. It is critical
for companies, even if their product is
technically superior, to ensure customers
perceive that value. If customers don’t buy
the arguments, superiority doesn’t matter.
BREAKingDOwnTHEvAluE
EquATiOn
The principle used to be that you charge
more for more value. Globalization has
completely undermined this. You can
essentially get more for less these days.
Baliga posits a new equation for gaining
a better understanding of what customer
value means in today’s economy. His
equation comprises four variables: value
+ willingness to pay + price + cost.
Cost is a controllable variable. Companies can directly impact their margins by
changing their production costs.
Price is also controllable, but it is different in that it is a strategic variable. A
company could price their offering to get
the most out of the exchange, or price
the offering lower to keep competitors
out of the market, for example.
Willingness to pay and value are
trickier. “You could say there is a
one-to-one correspondence between the
value you provide to a customer and his
willingness to pay for that value,” says
Baliga. The same value proposition to
various customer segments could generate
different outcomes in willingness to pay.
The value of the offering doesn’t change
in this case, but customers’ perception of
that value does.
In other cases, the value does change.
To illustrate this, Baliga recalls the story
of thalidomide. This drug was introduced
in the 1950s as a means to reduce nausea
during pregnancy. It was withdrawn from
the market once it became clear that the
drug caused birth defects.
The new equation for
customer value:
value + willingness to
pay + price + cost
»
3|2010waterlink
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3.9.2010 15:05:07
In the ensuing decades, doctors tried
thalidomide for other ailments and
discovered that it worked very well. The
perceived value of the drug changed, and
people were willing to pay for it again.
Eventually it was discovered that thalidomide worked well against myeloma, a
type of cancer. Once again the perceived
value changed, and this time, customers’
willingness to pay increased even more.
In the business-to-business context,
however, monetary aspects are still a
higher priority according to Storbacka.
“If you are going to sell something
that really creates value for the customer,
you should be able to prove that to
the customer,” he says. To do this, he
suggests using ‘customer quantification’
(see Factbox page 18).
16
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DiSCOvERingCuSTOmERvAluES
Regardless of how a company quantifies
value, the quantification is only as good
as their underlying understanding of
their customers.
“The real key capability in all this
is what I call customer value research,”
Storbacka says. “In any context, you
need to have this capability to understand what is valuable to customers.”
More often than not customers cannot articulate the real drivers themselves.
What customers say is valuable is not
reflected in their actual behavior.
“You have to dig behind the scenes
to really understand what the critical
value drivers are for the customer,”
adds Baliga. He recommends looking at
previous purchase decisions to see what
attributes the customer seems to have
valued.
New methods based on anthropology
and ethnography are being developed to
help companies better explore and grasp
customer value perceptions. The main
trend is to participate and to observe
over longer periods of time to really
understand what is going on with the
customer.
“We need to have an ongoing
relationship with the customer in order to
understand and solve the critical needs of
that customer at any particular point.”
CuSTOmERExPERiEnCE
mAnAgEmEnT
Especially in the heavy industry context,
this relationship with customers plays
waterlink3|2010
3.9.2010 15:05:11
”In any context, you
need to have the
ability to understand
what is valuable to
customers.”
a major role in influencing buying
decisions.
“A company must have good relationships with all its influencers. That’s
the key,” Baliga says. “The challenge
is making the right value pitch to the
particular individual, recognizing what
is of value to him or her at that stage.
A plant manager, for example, wants to
minimize downtime. The CFO wants to
see an increase in profitability, and the
purchasing guy wants to reduce costs.”
The complexities of customer
relationship management, or rather
customer experience management, can
be overlooked.
“Every encounter with a customer
in any form at any time in any way
through any channel is a starting point
for signaling value. Whatever we do with
the customer should be viewed from
that perspective. Whatever it is – from
sending an invoice to making a phone
call – does it fulfill our brand promise,
even from an emotional point of view?”
Storbacka says.
Staying on message is a difficult
thing. It requires clear value propositions
that are understood by everyone, and
strong leadership within the company
that supports those propositions.
“Most companies still really struggle
with this,” Storbacka notes. “Internal
marketing of value propositions is as
important as external marketing.”
To keep everyone on message, Baliga
believes the incentive systems really have
to support that.
3|2010waterlink
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»
17
3.9.2010 15:05:15
“If you tell your people to sell value,
but reward them based on volume, you
won’t get value sales. There are too
many examples of companies talking
value and new ways of thinking, but
not following up in terms of their
incentives.”
nEwOPPORTuniTiES
Influencing buying decisions through
customer experience management is one
way to drive business growth. Another
particularly interesting opportunity lies
in what Storbacka calls use value.
Customer value can be broken down
into two clear parts. One is exchange
value, which is the value of the actual
exchange, or in other words, what the
customer is willing to pay. To exist, a
company must at least convince the
customer their offering has an exchange
value. Increasingly, however, the bigger
chunk of customer value is of the second
part, use value. Use value is the value the
customer gets out of the offering as they
use it, be it a service, a chemical, a piece
of equipment, whatever.
“From a strategic viewpoint, this
is a very interesting business opportunity,” notes Storbacka. “The question
companies should be concentrating on
is how to change the offering definition
in such a way that customers can get a
share of not only the exchange value,
but also of the use value.”
Pratt & Whitney, for example, used
to just sell jet engines, but now they sell
18
21321654.indd 18
usage of them. The real customer value
from the engines, generating power, is
sold as a service. This has a positive
impact on the customer’s balance sheet
in terms of capital since the customer
only pays for usage without investing
in the hardware. At the same time, Pratt
& Whitney have an extended source of
income.
This shift towards use value is a very
promising new dimension for growth,
but the jury is still out. Companies do
seem to be moving in this direction, but
as with any new paradigm, the shift is
gradual. n
n Customer
quantification
•Canyouprovetothecustomer
thatyourofferinghelps
increaserevenue(=sell
more)?
•Doestheofferinghelpthe
customerreducethecostof
runningoperations(=total
costofownership)?
•istheresomethinginthe
offeringthatmakesa
differenceinthecustomer’s
balancesheet?Forexample,
reducingworkingcapitalor
fixedcapital,orfreeingup
resourcesorgettingmoreout
ofexistingcapital?
•Doestheofferinghaveany
impactonthecustomer’stotal
risk,forinstance,byreducing
riskexposure?
waterlink3|2010
3.9.2010 15:05:47
teXt RAnDElwEllS|PHOtOSgETTyimAgES
StORmy weAtHeR
The city of Longueuil, located on the South Shore of Montreal QC, Canada, uses Kemira
technology to ensure its water meets drinking guidelines even in the toughest conditions.
J
ust over ten years ago, the water treatment plant in Saint-Lambert (today
Longueuil) faced a real challenge.
The facility had just been upgraded
with a ballasted sand system capable
of treating water at very high speed.
They continued to use aluminum sulfate
as the main coagulant. However, this
proved to be a serious problem because
in that same year, Montreal got heavy
runoff that severely affected the quality
of intake water. The aluminum sulfate
reacts very slowly in cold temperatures,
and as a result, the plant was unable to
meet drinking water guidelines.
To help Longueuil obtain a faster
and more effective reaction, Kemira
introduced a new type of coagulant:
Polyaluminum Silicate Sulfate (PASS).
PASS is a pre-hydrolyzed, aluminum
sulfate-based coagulant that works well
in both warm and cold temperatures.
As soon as PASS was added, the water
quality improved significantly and
allowed the city of Longueuil to fulfill
the guidelines with ease.
PASSBEnEFiTS
“The key added value we have seen with
Kemira technology is that it ensures we
meet the drinking water guidelines,”
remarks Alain Turcotte, Longueuil
plant superintendant. Since PASS is very
effective when the intake water is cold, it
was the perfect solution for the plant in
Saint-Lambert. The plant also discovered
that by using PASS, they were able to
get a higher pH level in the water. This
had the added benefit of reducing the
amount of lime needed, which lowered
operational costs.
“The beauty of this solution is that
PASS and aluminum sulfate are fully
compatible,” says Manuel Moreau,
Director of Sales for Kemira, Municipal,
Canada. As soon as the weather turns
cold or there is a major storm, the plant
can change to Kemira PASS. They switch
back to aluminum sulfate during the
summer, although other plants in the
region stay on PASS year round.
TRAnSPAREnTAnDTRuSTwORTHy
area, making the company the largest
manufacturer of coagulants in the
region. Trust and transparency are the
key values on which the business model
has been developed.
“Kemira has contacted us on a
regular basis to evaluate their new
technology to make sure we have the
right chemistry in use,” says Alain
Turcotte.
Manuel Moreau was the Longueuil
account manager at the time PASS was
introduced. That role has now been
taken over by Mélanie Lefebvre, Senior
Sales Manager, who continues a very
close relationship with the customer.
“We believe that if something is not
working, we can be open about it and
learn from it,” say Lefebvre.
Confidence in Kemira has increased
dramatically at Longueuil. They have
now called on Kemira to help them
as they implement the Excellence
Program for Drinking Water sto achieve
significantly higher quality standards. n
Kemira has built strong relationships
with its customers in the Montreal
3|2010waterlink
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19
3.9.2010 15:05:51
Kemira’s
messenger
More and more people see Kemira as a leading
water expert. Enhancing a brand, however,
requires consistent work over the long term. We
joined Leena Lie, Vice President of Marketing
and Communications, for a busy day at work.
TexT Matti ReMes | phoTos RaMi LappaLainen
T
he morning starts with a latte.
Leena Lie has a few moments at the
kitchen table to immerse herself in
the news before a hectic day at work.
Recently, the news has made her
happy, increasingly so: the extensive
strategic changes at Kemira have not gone
unnoticed by the media. “Our decision to
focus on water expertise has brought us
plenty of positive publicity,” says Lie.
Water is a hot topic around the
world because of the alarming state of
the Baltic Sea, urban water problems
in developing countries and emerging
economies, as well as many other issues.
“This presents immense opportunities for water experts like Kemira. We
must be able to rise to these challenges.”
One step ahead
Lie has a 20-minute drive from home
in northern Espoo to the Kemira
headquarters in Ruoholahti in Helsinki.
Today’s schedule includes urgent communications issues and some planning
for the future – in addition to the latest
interim report, which was published a
few days earlier.
20
21321655.indd 20
“The day never turns out to be
what it looks like on the calendar in the
morning,” Lie says with a smile. “Communications is at the core of everything
and, preferably, always a little ahead of
everyone else. We often need to respond
to issues on very short notice.”
Lie was appointed Vice President of
Communications at Kemira in 2009.
Since March 2010, after Päivi Jokinen,
Executive Vice President of Marketing,
took maternity leave, she has also
handled marketing.
At Kemira, external and internal
communications and marketing are
the responsibility of an 11-member
team. In addition, the European, North
American, South American and Asian
markets have specific persons in charge
of communications and marketing.
The product organization also plays an
important role in marketing through its
close collaboration with customers.
“The communications and marketing
team serves as a coach and a consultant
within the company, helping all
employees get their messages across
professionally. We offer, for example,
Leena Lie with
Marja Jokinen
(left), head of
internal
communications,
and CeO harri
Kerminen.
»
waterlink 3 | 2010
7.9.2010 11:01:38
Liisa tikkanen (left), Jane toikka,
Leena Lie, Johanna dumell, arja Vanhanen
and sini Koskinen in a marketing and
communications team meeting.
.
trainee Jane
toikka preparing
a media
training course
schedule.
“Ourdecisionto
focusonwater
expertisehas
broughtplentyof
positivepublicity.”
3 | 2010 waterlink
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21
7.9.2010 11:01:43
Leena Lie
• Vice president of Communications
at Kemira since 2009.
also responsible for marketing
since March 2010.
• Born in 1968
education
• MBa
Key woRK histoRy
• KOne: Vice president, Brand and
Reputation Management, 2008–
2009; Vice president, Internal
Communications, 2006–2008
• nokia: head of Communications,
Customer and Market Operations,
2005–2006; senior Manager, Internal
Communications, 2002–2005;
Manager, Communications, nokia
Mobile phones, 1999–2002
• hartwall arena: Manager,
Marketing, Communications and
events, 1997–1999
media appearance training for management and other key employees,” Lie
explains.
MuLtIdIMensIOnaL Messages
The first meeting of the day is with
Harri Kerminen, CEO of the Kemira
Group. Lie and Kerminen hold regular
meetings to discuss topical issues in
marketing and communications. Today,
these include a future press release and
a presentation Kerminen will give to
guests from India.
Communications and marketing
have gained significance in Kemira,
which pleases Lie. “These issues become
increasingly important as we seek new
growth and introduce new products in
new markets.”
Kemira’s carefully thought-out
core message, which focuses on water
expertise, makes Lie’s work a little easier.
After the new strategy was introduced,
this core message emphasized Kemira’s
role in water-intensive industries. At
22
21321655.indd 22
Leena Lie and CeO harri Kerminen hold regular meetings to
discuss topical issues in marketing and communications.
the next stage, the focus was on water
quality and quantity management. This
year, the focus is even more on Kemira’s
investments in specific customer
industries and emerging markets, especially India and China. In addition, the
emphasis is on Kemira’s water application expertise.
“We have a clearly defined strategy,
that will gradually become even more
detailed and multidimensional.”
OpeRatIOns In 40 COuntRIes
Before noon, Lie and Kerminen hold
a video conference for Kemira’s staff
about the interim report, with direct
connections to seven locations that range
from Leverkusen to Shanghai.
Kemira operates in 40 countries
worldwide. Because of the time differences alone, this presents challenges
– which Lie and Kerminen overcome
by holding a similar conference in the
afternoon for personnel in North and
South America.
The specific features of different
markets present even greater challenges.
Kemira’s product and service application offerings vary by country and by
customer segment.
waterlink 3 | 2010
7.9.2010 11:01:47
Corridor meetings have
their time and
place. Leena
Lie in a brief
exchange of
ideas with
arja Vanhanen
from product
marketing
and Marketing
Coordinator
sini Koskinen.
“Ourreputation
asareliable,
high-standard
partnerisanasset
amongtough
competition.”
“Our customer base in the paper
industry is relatively narrow, but other
industries have a diversity of customer
groups, ranging from sugar factories to
the beverage industry,” Lie says.
In municipal water treatment,
Kemira participates in competitive
bidding, where price matters the most.
“Our strong and solid brand helps
us in the municipal sector as well. The
competition is tough, and our reputation
as a reliable, high-standard partner is an
important asset.”
BetteR taRgeted MaRKetIng
After the first video conference, Lie tackles a press release that will be published
in the afternoon. Kemira has acquired a
production plant in Great Britain, aiming
to increase its product offerings for the
oil and gas industries in the North Sea.
The final tweaks she leaves for
later because she needs to run to the
next meeting, which deals with digital
media channels. In addition to Kemira’s
personnel, the participants include
representatives of a consultancy firm.
The purpose is to create an operating
model for making more effective use
of digital channels in marketing and
communications.
“In addition to the company website,
discussion and expert forums can make
for efficient channels. It is important to
consider, however, which are the best
ways to get our message across with the
resources we have.”
Lie has one more meeting in the afternoon, this time with her team. According
to Lie, communications and marketing
in a company like Kemira naturally
intertwine into a seamless whole.
“The upper-level messages are approximately the same, even though the
target groups are different. Marketing is
targeted at customers, while communications has other audiences.”
Over the next few months, the goal
is to make marketing even more closely
targeted. “We are gradually building a
global model that, in addition to Kemira’s
general messages, includes marketing targeted deeper into the customer interface.
This may be related to launching new
products, for example.”
WateR expeRtIse Is a pRIORIty
Toward the end of the day, Lie reads
e-mails from her crowded inbox and
catches up on other tasks. Despite the
hectic day, she also has some time for
planning future communications and
marketing operations.
“Building a brand requires consistent
work over the long term. The same
themes and messages need to be
repeated, over and over, year after year,
before they take root.”
Kemira is well known in its native
Finland, but Lie still occasionally
encounters ideas and images that no
longer hold true.
Elsewhere in the world, the situation
is entirely different: Kemira needs more
visibility, especially in new markets.
Communications and marketing need
to consider the company’s resources
and identify the best methods for each
market and customer segment.
“We don’t have the resources for
grand-scale brand building. We must
choose the methods that best reach the
targeted customer groups.”
This year, major projects include the
Expo 2010 in Shanghai, China, where
Kemira contributed to Finland’s pavilion. For China, this world exhibition
is an event of primary importance. All
business in China is based on official
relations, and the Expo offers excellent
opportunities for new business. n
3 | 2010 waterlink
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23
7.9.2010 11:01:49
r
egistration
umble
As the largest European manufacturer of aluminum
and iron coagulants, Kemira takes a leading
role in meeting the new requirements of REACH.
text by Randel Wells | photos Rami lappalainen
24
21321656.indd 24
waterlink 3 | 2010
3.9.2010 15:23:54
t
he Registration, Evaluation,
Authorization and Restriction of
Chemical substances legislation
(REACH) is a new set of requirements
for the EU chemicals industry. REACH
started with a pre-registration that
ended in 2008. The first full registration
phase, targeting highest volume, highest
risk substances ends in 2010. The next
two phases are in 2013 and 2018,
after which all registrations need to be
maintained.
“The regulations in the EU chemical
sector are of fundamental importance
to us,” says Helena Huttunen, principal
REACH specialist at Kemira. Kemira has
500 substances to be registered, of which
100 need to be registered now in 2010.
The REACH process is managed
by the European Chemicals Agency
(ECHA), based in Helsinki, Finland,
where Kemira’s headquarters are also
located.
A gAme chAnger
“REACH will totally redefine the
playing rules of the chemical business
within the EU and beyond,” says
Huttunen. “The regulations are
becoming fundamentally stricter. The
companies who are able to cope with
these demanding ways of working will
succeed and get new opportunities.
Those who are not able to adapt and
react so quickly will lose their game.”
The new REACH requirements are
much stricter than those of the preceding
chemical legislation, especially regarding
the so-called ‘phase-in’ substances,
chemicals that have been on the EU
market for a long time.
“Over 100,000 substances fall into
this category, and many have been used
for decades. It’s going to be interesting to
see how many of these can be registered
properly,” notes Liisa Rapeli-Likitalo,
Kemira product safety senior manager.
consortiA And sieFs
Two types of new bodies were formed to
help companies comply with REACH:
consortia and Substance Information
Exchange Forums (SIEFs). The consortia
are completely voluntary, with each
consortium covering certain substances.
Consortium members are mostly manufacturers or importers of those substances
and often know each other well.
The SIEFs, on the other hand, have
been defined by the REACH legislation.
A SIEF is a group of legal entities who
are registering the same substance. All
the tens, hundreds, even thousands of
companies who have pre-registered the
same substance must be members of the
SIEF to ensure common development
of the registration dossier for that one
substance.
The lead registrant for the SIEF
prepares the joint registration submission that contains all the scientific details
of the substance as required by REACH:
physical, chemical, toxicological and
ecotoxicological. The companies also
prepare the chemical safety assessment,
either jointly or individually, which
covers uses of the substance and their
risk assessments.
“The consortia manage the contracting for collecting content, but SIEFs are
the legal actors that must be managed
by the lead registrant and who submit
the registration dossiers,” says Huttunen. Kemira leads the Aluminum and
Iron Salt REACH Consortium (AlFe).
Altogether, Kemira has 24 substances
where Kemira is the lead registrant. AlFe
covers 15 of these substances.
As the lead registrant, Kemira is
responsible for the SIEF management
and steers the consortium work. The
lead registrant has to be transparent
to the members of each of the relevant
SIEFs in the registration communication
with ECHA. For the consortium led
by Kemira, that means 15 AlFe SIEFs.
Coordinating communication and
exchange of information among literally
thousands of SIEF members is no small
task.
“REACHwilltotally
redefinetheplaying
rulesofthechemical
business.”
supply chAin communicAtion
“REACH requires enormous amounts
of details concerning the safe use of
substances, as well as administrative
data to be communicated up and down
in the supply chains and between the
REACH stakeholders,” remarks RapeliLikitalo.
“Besides REACH registrations we
also have to deal with substances to be
authorized, have systems in place to
implement the Classification, Labelling
and Packaging (CLP) Regulation and
take care of the new requirements for
extended Safety Data Sheets,” continues
Rapeli-Likitalo. “At the moment we are
very busy with the 2010 registration
duties, but we must not forget that the
supply chain still needs a lot of training
to understand and ensure correct
implementation of REACH.”
According to Huttunen, it is too
early to say yet how REACH will affect
business.
“REACH will change so many things:
new registration requirements, classifications and markings, constantly updatable
safety data sheets, as well as all additional
use and exposure information to be communicated within the supply chain.” n
3 | 2010 waterlink
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25
3.9.2010 15:23:54
TexT by Sami anteroinen | phoTo Getty imaGeS
Making
Waves
Come together, right now.
The Baltic Sea Action Group steps up.
T
he Baltic Sea is in dire straits. It
is the most polluted sea in the
world and under a massive strain
from year to year. As the Baltic Sea is a
relatively shallow and largely enclosed
sea, it is an especially vulnerable ecosystem. The sea has suffered for decades
of unchecked pollution from oil spills,
nutrients and toxic dumping – not to
mention wartime mines and munitions.
Trying to resurrect the Baltic Sea
has seemed to be a particularly tall
order, since nobody really owns the
problem. Sure, there are a great number
of countries around the Baltic shores,
but no nation has really stepped forward
and grabbed the banner.
26
21321658.indd 26
Nevertheless, citizens around the
region have been watching the situation
deteriorate for years – and are finally
starting to take action. One example
of this activity is the Baltic Sea Action
Group that was launched a little more
than two years ago.
Three people – Ilkka Herlin, Anna
Kotsalo-Mustonen and Saara Kankaanrinta – shared a passion for the Baltic
Sea and already had a history of
activities related to protecting it. Still,
as the three of them got together, they
started wondering if there wasn’t
something more that they could do. The
Baltic Sea Action Group (BSAG) started
small, but has big aims. Operating as
waterlink 3 | 2010
3.9.2010 15:15:03
This inhabitant of
the Baltic Sea is
the grey seal. High
levels of PCB have
caused problems
for the seal’s
reproduction.
3 | 2010 waterlink
21321658.indd 27
27
3.9.2010 15:15:06
a go-between, the non-governmental
organization (NGO) is working hard to
raise the level of awareness for the issues
at hand. BSAG has held several seminars
and founded projects for reducing the
impact of agriculture, maritime activities
and hazardous waste on the Baltic Sea.
BalTiC SuPer SummiT
To date, the finest hour of BSAG
occurred in February 2010 in Helsinki
as the organization hosted a one-day
Action Summit in order to tackle the
challenges head on. National leaders
from all nine Baltic coastal states
were in attendance. Even leaders from
“catchment” countries such as Norway
and Belarus took part. The summit had
strong support from the EU as well. All
in all, there were about 500 participants,
representing regional organizations,
large and small businesses, NGOs and
local activist groups.
There are
nine nations
surrounding
the Baltic sea.
Photo from
Sweden’s capital,
Stockholm.
Almost all communities and cities within
the Baltic Sea watershed clean their waste water
using chemicals supplied by Kemira.
While the political powers-that-be
were well represented – from Finnish
President Tarja Halonen to Russian
Prime Minister Vladimir Putin – it soon
became clear to everyone involved that
this was truly a common call to arms,
not just a show for politicians.
The main focus of the summit was to
harness the skills and energy of concerned
individuals and businesses across the
region. This was achieved by making the
participants commit to the process of
nurturing the Baltic Sea back to health.
“We were looking to get 50 specific
commitments in the summit,” explains
BSAG Secretary General Saara Kankaanrinta, adding that the idea was to extract
a pledge from each stakeholder country,
and find a remedy of sorts for each of
the problematic areas in question. At the
end of the day, BSAG walked away with
over 140 commitments.
28
21321658.indd 28
STand uP, STand OuT
While there are commitments from
countries, multinational companies and
farmers’ associations around the region,
just sifting through the bag of promises is a time-consuming task. Still, in
Kankaanrinta’s mind there are a couple
of pledges that do stand out:
“Looking at the various countries,
Russia made a very impressive commitment, pledging environmental clean-up
programs around St. Petersburg, on the
Gulf of Finland, and in the Kaliningrad
enclave.”
Furthermore, Russia has not
wasted time acting on at least some of
its promises. In May it was announced
that Russia is ordering a new type of
oil recovery ice breaking vessel from
Finland.
Taking stock of the corporate side,
Kankaanrinta mentions that Kemira is
in the winter time, the Baltic sea freezes
over. Skating on the ice is popular among
extreme sports lovers.
waterlink 3 | 2010
3.9.2010 15:15:11
one of the companies that has wholeheartedly embraced the effort and is very
actively involved in the process.
“Kemira is one of the best example
cases where the core business and
ideology of the company are very well
aligned with our targets.”
In fact, Kemira’s business activities
are playing a direct role in decreasing
the wastewater load in the Baltic Sea.
Almost all communities and cities within
the Baltic Sea watershed clean their
waste water using chemicals supplied by
Kemira.
FigHTing euTrOPHiCaTiOn
In its pledge, Kemira commits to
giving its expertise and research efforts
to returning sludge-borne valuable
nutrients, nitrogen and phosphorus,
safely into the natural cycle without
causing eutrophication.
Aija Jantunen, General Manager
of Kemira’s Municipal & Industrial
segment, points out that all waste
water treatment does, in fact, produce
sludge.
“The more efficient the waste
water treatment, the greater the sludge
disposal, and sludge disposal is a growing problem,” Jantunen says, adding that
without a controlled return to nature,
the nutrients in sludge can drift back and
eutrophicate waterways, or accumulate
in landfills.
However, Kemira can make such
sludge both hygienic and odorless, after
which the sludge can be used to enhance
crop production in a safe manner. In
Finland, sludge treated using Kemira’s
Kemicond method is accepted as a solid
tool for soil improvement.
“The heavy metal contents in
sludge have been successfully reduced
in Finland. This was done by requiring
industrial players to apply an efficient
pretreatment method when conducting
their wastewaters into the sewer system.
Kemira’s expertise is used in many of
these applications,” Jantunen adds.
Making sludge hygienic is only the
first step: in the future, Kemira will
focus more and more of its energy and
resources on the safe recycling of the
nutrients inherent in sludge.
“Recycling nutrients is a part of our
large-scale research venture at the Center
of Water Efficiency Excellence (SWEET).
The study yields information that can be
used in the promotion of recycling.”
According to Jantunen, there is now
sufficient political will in Finland to
abandon a way of life that is wasteful
with raw materials. The Finnish government would like to see Finland develop
into a model country for recycling. To
3 | 2010 waterlink
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»
29
3.9.2010 15:15:12
meet the targets set at the BSAG Summit,
the government established a working
group whose task is to give recommendations for reducing nutrient loading
and for the proper recycling of nutrients.
all HandS On deCk
Both Kankaanrinta and Jantunen
agree that the state of the Baltic Sea is
so alarming that everybody needs to
do their part. While big countries and
corporations have the muscle to make
things happen, there is also room for
smaller players:
“Everyone can contribute in accordance
with their capabilities,” Kankaanrinta says.
This pooling of resources from near
and far, big and small, is a very Finnish
phenomenon. Therefore it is somehow
fitting that a Finnish NGO should
offer the world a ray of hope in the
aftermath of the Copenhagen debacle.
Some media representatives went so
far as to claim that what was created
in Helsinki was something akin to a
miracle: a post-Copenhagen paradigm
for future collaborative, cross-border
environmental action.
Ilkka Herlin, co-founder and the
Chairman of the BSAG foundation, is
not so keen on superlatives. He points
out that the work has only started: one
has to monitor the stakeholders and
make sure that they stay true to their
word.
“We will continue to keep a close eye
on the situation, since saving the Baltic
Sea is a continuous process.”
YeS, We Can
According to Kankaanrinta, each
committed party advances according to
its own set timetable, moving from one
milestone to the next. Some have already
fulfilled their commitment, while others
strive to hit their target in, say, five years.
Ilkka Herlin sees the role of BSAG
as a moderator between the various
stakeholders:
“We can speed things along, bring
different parties together and help
facilitate change.”
This includes getting politicians,
companies and various organizations
on the same page – and optimizing the
support from citizens.
“In today’s world, we feel that this is
the best way to get things done.” n
30
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Eutrophication
• One of the worst problems affecting the
Baltic Sea.
• a consequence of more than a century
of nutrient loading caused by human
activity.
• The loading is caused, for example,
by habitation, industry, agriculture and
forestry in the Baltic coast states.
• The heavy nutrient load causes an
increase in the sea’s basic production.
due to the large amounts of available
nutrients, microscopic phytoplankton
has increased significantly, algal blooms
have become more prevalent, and the
water has become turbid.
• eutrophication is also seen on beaches,
seashores and fishnets, which become
slimy.
• The vulnerable species of the Baltic Sea
also suffer from eutrophication.
Source: The Baltic Sea Portal
waterlink 3 | 2010
3.9.2010 15:15:16
COLuMN
THE GREAT
CHEMICAL
REACTION
TExT Dan Steinbock | ILLusTRATION aRiJUkka tURtiainen
A
fter the 1973 energy crisis, the
combined gross national product of
Japan, the United States and the four
key countries of the European Community
(UK, West Germany, France, and Italy)
accounted for 45 percent of the global GNP.
By the mid-1980s, global competition was
increasingly driven by the leading industrial
economies.
However, over the few coming decades,
the growth generated by the large developing
countries, especially the large emerging
economies or the BRICs (Brazil, Russia, India
and China), is expected to become a much
larger force in the world economy. Only the
United States and Japan will remain among
the six largest economies in 2050.
The established G7 economies and the
large emerging BRICs play a vital role in the
world economy and global growth. Together,
they account for 69 percent of the world
GDP and more than 50 percent of the world
population.
enoRmoUS GRowth in the Global
chemicalS inDUStRy
Since 2008, all industries have been coping
with a rapidly changing business environment
worldwide. The global chemicals industry is
not an exception.
Until the first half of 2009, the industry
still suffered from steep declines in volume and
price. On the other hand, industry practitioners
have seen the steady, accelerating rise of the
large emerging economies since the mid-1990s.
Between 1995 and 2005, world chemical
production increased by almost 40 percent,
and more than 95 percent of that growth
originated from developing countries.
The momentum of growth will be in Asia.
chanGinG inDUStRy clUSteRS
In the most competitive nations, clusters are
vital because they increase productivity, enable
innovations and facilitate new business.
In the global chemicals industry, mergers
and acquisitions will contribute to changes in
and among clusters.
Last year, the Chinese chemical industry
enjoyed 14.6 percent growth. Foreign
multinational companies increased their
investments in the mainland, and Chinese
companies were increasing stakes in Western
chemical companies.
India is following in the footprints. For
the global chemicals industry, it represents a
great untapped market for petrochemicals and
plastics.
In the pre-crisis era, eight of the top ten
companies in the industry were based in
advanced economies in the West. By the mid2010s, the global chemicals industry will look
very different.
But the quest for innovation and
productivity will continue to characterize
the global industry leaders and flagship
companies. n
Dr. Dan Steinbock serves as a research
director of international business in the India,
China and America Institute.
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TargeTing
realneeds
Whether it is recycled or virgin material, the
new generation of Kemira’s dry strength additive
resolves packaging and board production
challenges unlike any other solution before. »
TexT by Randel Wells | phoTos getty images and istock
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4000 series is very resilient in such tough
environments.
“One of the fundamental differences
between the European and North
American markets is that in the former,
there are a lot of recycled packaging
manufacturers. In North America most
of it is virgin linerboard,” notes Swales.
Virgin board makers don’t have
the same contamination issues as with
recycled material, but their concerns are
related to finding lighter base weight
solutions to reduce the amount of fiber
content while maintaining or increasing
the strength of the finished board. Here,
too, the Fennobond 4000 series is able to
provide the extra strengthening needed.
K
Kemira’s new dry
strength additive, the
Fennobond 4000 series
represents a completely
new chemistry for
synthetic strengtheners.
“We have been systematically
developing a technology that is based
on standard chemistry synthesized in
a novel, intelligent way, creating a newgeneration strengthener,” says Kimmo
Strengell, global product line manager at
Kemira.
Strong heritage
Synthetic strength additives have been
around for decades in North America
but they are not yet so widely used
in Europe. With a strong heritage in
leading-edge synthetic technologies for
tissue and towel manufacturing, Kemira
has applied this know-how to develop
something new for packaging and board
manufacturing.
“We had a great deal of fundamental
understanding about the chemistry from
our Fennobond 3000 development.
The 4000 series incorporates that
understanding. As a global company, we
can take advantage of technology transfer
34
21321661.indd 34
end-products for
fennobond 4000
include packaging
for household
equipment, coffee
mug insulators and
fruit boxes.
like this,” says Darren Swales, North
America’s application group manager at
Kemira.
recycled or virgin
There are good strength additives on
the market, but increasingly they cannot
meet the challenges package and board
manufacturers face.
“Our target is to provide an
extension to currently available strength
technologies,” remarks Strengell.
Existing strength additives tend to be
sensitive to water hardness and strongly
closed processes.
“Usually high calcium content in water
has a negative effect on the most common
dry strength agents. The efficiency of
starch also decreases in high calcium hardness environments. The Fennobond 4000
series is absolutely insensitive to those
conditions,” says Bernd Hauschel, team
leader of wet-end chemistry at Kemira.
Recycled materials and closed circuit
production also introduce contaminants
that reduce the effectiveness of conventional strength additives. High conductivity caused by a high concentration of
inorganic salts also works against other
strengthening additives. The Fennobond
excellent propertieS
The Fennobond 4000 series is demonstrating excellent performance in strength
improvement and in the ability to resist
system variation. Moreover, fiber, fines
and filler retention is also enhanced. In
addition to product performance, product
characteristics such as shelf-life and dry
solids content have been significantly
improved over current technologies.
The dry solids content of a chemical
has a major impact on logistics. The
lower it is, the more water content there
is. This directly impacts the product
weight and volume, and therefore freight
costs. Existing synthetic strength additives usually do not exceed 10 percent
dry solids content. The Fennobond 4000
series has already achieved a level of 21
percent at this stage.
A second key characteristic is
shelf-life. Before now, synthetic strength
additives have been fairly unstable.
Their shelf-life is no more than a few
weeks at most. The Fennobond 4000
series, however, is remarkably stable. Its
shelf-life is measured in months.
poSitive full Scale teSting
After considerable development and
testing in controlled environments, the
Fennobond 4000 series has moved into
the pilot stage with customers. Two
extended pilots are showing excellent
results in very demanding environments.
In France, a new grade development
project is underway using 100 percent
recycled material. The customer has an
existing strengthening system in place
waterlink 3 | 2010
3.9.2010 15:19:12
using starch-based additives. By introducing the Fennobond 4000 series, they have
achieved considerably better strength.
Their ring crush and burst strength tests,
for example, have been improved by up
to 15 percent. They have also introduced
the Fennobond 4000 series to existing
grades and see similar improvements.
A second pilot is taking place in
Turkey. Here the customer wants to use
lower quality pulps in its manufacturing
of testliner and fluting. This has a
significant impact on the strength of
their final product. With the Fennobond
4000 series, they have been able to
maintain existing strength characteristics. This gives them the opportunity to
lower their costs for raw material.
good timing
Instead of the
usual few weeks,
Fennobond 4000’s
shelf-life in measured
in months.
“The packaging and board segment
is very indicative of the market as a
whole, and now we are seeing a good
uptake in that segment,” says Swales.
“The Fennobond 4000 series provides
us with another strength technology in
our portfolio just in time to meet these
needs. Developed in Europe, it is now
being prepared for the North American
market. Kemira anticipates customer
evaluations very soon.”
The Fennobond 4000 series is well
positioned to counter higher virgin pulp
prices and increased use of recycled
material. When manufacturers get better
strength, they can offer new grades,
speed up production, or reduce basis
weight. In other words, the potential
return on investment with the Fennobond 4000 series is significant.
Kemira is actively looking for
customers who have reached the limits
with their starch-based or synthetic
strength additives.
“New grade developments or basis
weight reduction cases are good, but we
are also looking for cases where the customer really does not have any options
left because their production conditions
are so difficult,” says Hauschel.
“There are also mills that are not
equipped yet with a starch jet cooker,”
continues Strengell. “Fennobond in
that case is a good alternative to an
otherwise significant capital expenditure.
There can also be periods in production
when for one reason or another strength
characteristics fall below accepted levels.
The answer to all these challenges is the
Fennobond 4000 series.” n
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text by Satu JuSSila | photo Getty imaGeS
From
waste
36
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3.9.2010 15:20:27
to useable
product
What if you could turn waste into a new source
for raw material and save money in the process?
Kemira technologies are making this possible.
F
or any industry, the prospect
of converting by-products that
are normally treated as waste
into reusable products presents
interesting possibilities. Take, for
example, aluminum producers. For
these customers, Kemira can develop
and build a waste effluent treatment
plant using its patented waste effluent
technology.
Previously residues produced by the
plant were typically disposed at wastedisposal sites or sent to other industries
for additional processing. With the
new plant these residues are converted
into saleable products, which are then
used by Kemira in its own facilities or
marketed.
Products for differing needs
“Our technologies are helping industries
minimize the amount of waste they
produce and are making contributions
in conserving natural resources,” says
Per Andersson, director of product
management coagulants at Kemira’s
Municipal & Industrial segment.
Andersson is responsible for heading
the product management team in the
company’s coagulant product line.
He explains that Kemira’s main
raw materials for its coagulants are
different qualities of acids, aluminum
and iron metals, which Kemira can
purchase as ‘virgin’ products. But for
some industries, says Andersson, there
are by-products that come from their
core processes, which, he notes, “we can
convert into good quality raw material.”
reviewing individual Processes
Consider the pickling process at a steel
mill. Steel mills use acids for treating
(pickling) the surface of the steel plate
before further manufacturing. The acid
is then contaminated with iron coming
from the steel plate. Over time, the spent
acid must be replaced.
The spent acid can be neutralized
and sent for landfill, or if the volume is
big, it can be regenerated and sent back
to the beginning of the process.
“Depending on the situation, both
options are likely very expensive for the
steel mill,” says Andersson. As a third
alternative, industries could make use of
this spent acid that contains both iron
and some free acid as raw material.
The quality of different by-products
varies a lot, notes Andersson, and is a
challenge.
“Some are quite pure and some are
contaminated with impurities that we
do not want in our coagulants. For this
reason, we have developed different
processes to deal with different situations.
By working together with customers, we
can maximize the raw materials available
from any one source.” n
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numBers
June 03, 2010 – august 27, 2010
Kemira’s marKet PerFormance & Press releases
10.50 €
june 23, 2010
kemira sells
fluorescent whitening agents to
German Catec
Gmbh
10,0 €
9,50 €
june 03, 2010
members of
the nomination Committee
appointed
Kemira share
9,0 €
OMX Helsinki CAP
june 29, 2010
kemira Oyj
and nanyang
Technological university
start joint r&D
cooperation
around water
treatment and
purification
technologies in
singapore
july 1, 2010
Changes in
kemira´s
management
8,5 €
june 2010
j
Kemira is right on
schedule
text jyrki mäki-kala | Photo juha salminen
38
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7.9.2010 11:02:37
july 21, 2010
january-june
results on july
29, 2010 around
8.30 am Finnish
time
august 2, 2010
kemira acquires
albemarle´s facility
in Teesport, uk to
enhance product
offering to the oil &
gas industry in the
north sea region
august 27, 2010
Financial reporting schedule for
the year 2011 is
published
july 29, 2010
interim report
january-june 2010:
marked recovery in
demand compared
to last year,
significant increase
in operating profit
july 20, 2010
no fine in
european
Commission
investigation
into divested
animal feed
phosphate
business
july 2010
i
n 2008, Kemira’s Board of Directors
set five financial goals for the company:
Organic growth must be at least
5 percent annually. Cash flow after
investments and dividends must be positive.
The target level for gearing should be 40 to
80 percent. The return on capital employed
(ROCE) must improve continually. And
finally, Kemira’s operating profit (EBIT)
must rise to at least 10 percent of the
company’s turnover.
After two years of determined work,
we are seeing good results: we have already
reached three of these goals. Our annual
organic growth is not yet 5 percent, but our
businesses are working together with R&D
to achieve this goal.
auGusT 2010
Raising our operating profit margin
to 10 percent is a challenge, but we have
taken steady steps in the right direction. The
operating profit (EBIT) for our continuing
business operations was 3.3 percent in 2008
and 6.3 percent in 2009. At the end of June
2010, we had already achieved the level of
7.5 percent. n
Jyrki Mäki-Kala is Kemira’s Chief
Financial Officer.
CalenDar
October 28
at 8.30 am
interim report
january–september 2010
For more information about
Kemira’s stock and owners,
please see Kemira’s website at
www.kemira.com ➝ Investors
➝ Share information
3 | 2010 waterlink
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7.9.2010 11:02:38
numBers
neW research
emPhasis
text ranDel wells | Photo kemira
W
ater is on everyone’s mind these days.
While the situation varies from industry
to industry, most will be facing major challenges and tighter regulations in the near future.
Kemira’s Oil & Mining segment is taking
an in-depth look now at the substantive problems in the oil and gas, as well as the metals
and minerals sectors. “We are putting together research portfolios to better understand
these problems and to develop technical solutions around water quality and quantity management,” says Louis Rosati, Vice President of
Research and Development in Oil & Mining.
There are currently several research initiatives being carried out through Kemira’s
joint research institute, the Center of Wa-
KEMIRA IN BRIEF
Ownership (April 30, 2010)
%
kemira is a global,
eur 2 billion chemicals
company that is
focused on serving
customers in waterintensive industries.
The company offers
water quality and
quantity management
that improves
customers’ energy,
water, and raw
material efficiency.
kemira’s goal is to
be a leading water
chemistry company.
ter Efficiency which will run through 2013.
“Along the way we hope to commercialize
short-term gains, but the emphasis is on finding solutions for the long-term.”
Kemira’s aim is to focus on understanding
our customers’ processes in order to develop
total solutions that bring greater value, instead
of maintaining a product-centric approach.
Process modifications and optimization
of variables, in addition to the chemicals
added, are being investigated to find more efficient ways to use water.
“We believe our solutions will bring significant value to our customers facing water
management related problems, and of course
bring good business to Kemira.” n
(MEUR)
Q2/2010
Q2/2009
revenue
545.2
488.5
1969.9
Operative eBiT
40.5
29.3
124.9
Operative eBiT, %
7.4
0.17
6.0
0.11
6.3
0.47
15.1
23.4
82.2
ePs (eur)

Oras invest Oy
 solidium Oy
16,7
16,7
 Varma
9,8
 ilmarinen
5,2
 Other Finnish institutions
20,6
 non-Finnish owners, including
nominee-registered institutions 11,4
 households
17,3

kemira
www.kemira.com
2,3
meur
revenue
2009
Capex excl. acquisitions
Cash flow after
investments
1.9
83.9 **
202.2 **
Gearing, %,
end of period
48 **
104 **
53 **
equity ratio, %,
end of period
50 **
35 **
45 **
9139 **
8493 **
Personnel,
end of period
5177
** includes Tikkurila until march 25, 2010
meur
Operative eBiT
eur
ePs
3000
2400
200
0,8
1800
150
0,6
1200
100
0,4
600
2007 ** 2008 **
2009
1-6
2010
50
2007 ** 2008 **
2009
1-6
2010
0,2
1-6
2007 ** 2008 **
2009
2010
** includes Tikkurila
40
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Focus on chile:
high demand
For Water exPertise
text jyrki PalO
”K
emira’s water treatment products offer
new and interesting opportunities for our
customers in the mining industry in Chile,”
says Sergio Cabo, Vice President of Sales for
Kemira’s Oil & Mining segment in South America.
The mining industry represents seven percent of
Chile’s gross national product. Chile produces more
than one-third of the world’s copper. In addition,
the country is rich in gold, silver, molybdenum, zinc,
iron ore, nitrates and lithium, to name just a few
minerals and metals.
The mining industry is extremely waterintensive. In the most important mining areas in the
northern wilderness and in the Cordillera region
in the Andes, this water is taken mainly from the
mountains.
“Water is expensive to use and not readily
available,” says Cabo. “The efficiency of water use
and treatment is key to maintaining and expanding
operations and to calculating the profitability of
new mines. In addition, the mining industry is
nowadays required to comply with the principles of
sustainable development.”
With the help of Kemira’s extensive water
expertise, customers can increase water recycling,
reduce costs and enhance the efficiency of mineral
separation.
The value of new projects to be launched by the
Chile mining industry over the next few years is
estimated to billions of dollars. In addition, major
investments in desalination plants are in progress.
Kemira’s key focus areas are desalination, water
use and recycling, and mineral separation processes.
Product development efforts are based on local
expertise and local customers’ particular needs.
Until 2007, Kemira sold only titanium dioxide
products in Chile, but the company is now seeking
to expand its presence in this mining-rich region as
it makes the transition to a leading water chemistry
company. n
Thanks to its waterfocused strategy,
Kemira is discovering
new business
opportunities in Chile.
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AMAZING
Istockphoto
A New
product to
dye For
The MeTaMorphosis from hide to quality
leather products we value so highly is
an extensive process. It is also costly
and environmentally strenuous. Luckily,
Kemira ChemSolutions has created a
solution to alleviate some of those ill
effects.
The newly developed and rapidly
biodegradable Tanfor A-15 is a
formic acid based formula that can
be used for pickling and dye fixing.
Tanfor’s uniqueness is in its top quality
performance at reduced dose levels,
which essentially translates into greater
cost efficiency. Furthermore, Tanfor
is a superior acid dye fixing agent
that leaves more color in the end
product and less in the waste
water.
So, cost efficient, effective,
and environmentally sound,
Tanfor A-15 is bound to
be of interest to tanneries
around the world. n
Fresh perspectIves oN scIeNce
The firsT MillenniuM YouTh CaMp for
young talent in science was organized
in Helsinki in early June as part of
the national Millennium Technology
Week. The camp attracted nearly 1,000
applications from 62 countries. Based
on highly selective criteria, 30 applicants
were selected to participate. Half of the
participants were girls.
The purpose of the Millennium
Youth Camp is to encourage and inspire
young people to study natural sciences,
mathematics and technology. The camp
also promotes Finland as an education
and career destination. In addition, it
offers perspectives on the future beyond
current innovations. Kemira is one of the
sponsors of the camp.
The camp participants also attended
the Millennium Technology Prize award
ceremony. They had the opportunity
to meet the winner, Professor Michael
Grätzel from Switzerland, and the two
other 2010 Millennium Laureates. n
Young talent in
action. Jorge araya
(Costa rica),
santiago oviedo
rouco (argentina)
and Menna sirola
(finland).
Read more on the winner of 2010
Millennium Technology Prize on page 7.
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sAy cheese!
Istockphoto
The qualiTY of Cheese depends on a
remarkable variety of issues. One of
the most important ingredients in the
production of cheese is, naturally, milk.
The quality of milk is affected by the feed
served to cows. If the forage is preserved
inadequately, this can lead to problems
influencing the production of fresh dairy
products and cheese.
Kemira’s AIV product range ensures the
high quality of silage and prevents harmful
bacteria from growing and from transfering
into the milk. Consequently, it is possible to
avoid negative changes in taste and odor of
milk and cheese. Additionally, the structure
of cheese becomes as good as it should be. n
21321652.indd 43
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ALSO in thiS iSSue
Profile:
WaterLink’s
columnist
Dan Steinbock
From waste to
value – new
opportunities
for industry
Say cheese!
What’s
happening
in the uK?
Brainstorming with the
team. Kemira’s marketing
and communications director
Leena Lie believes efficient
teamwork adds value.
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