Experience at the Helm - Gunilla Saltin, Södra Cell

Gunilla Saltin has recently taken up the challenging position as head of Södra Cell

June 2008
By Amanda Marcus

At first sight, you could be forgiven for failing to pick out the new CEO of Södra Cell as one of the most senior figures in the pulp industry. Unassuming and modest, Gunilla Saltin greets visitors with a broad smile and disarming humour. But sit down with her for five minutes and it’s not difficult to see why she has the job of heading up the largest market pulp producer in Europe.

Gunilla Saltin: a pulp mill engineer to the core

Saltin is not only bright, multi-lingual and good with people: she is a pulp mill engineer to the core. Indeed it’s her love of all things technical and pulp-like that have seen her rise through the ranks at Södra Cell. After eight years at the company’s Värö mill, the last three as mill manager, the site is now at the cutting edge of energy efficiency and innovative technology. In typical self-effacing style, Saltin accepts no credit for the mill’s achievements: “There are 350 people there who have made the mill such a success. They did it, not me. People really enjoy working there. Absenteeism is around 2.25% compared to the national average of 5.5% so something is working well there, and had been for 10 years. I was very fortunate to be there when the results of previous hard work started rolling in. A lot of different factors contribute to a successful working environment. We take care of the cleaner as well as the mill manager.”

Saltin is keen to emphasise the importance Södra attributes to attracting and maintaining good staff. “The people here do a very good job and I enjoy working with them. We have a very good culture here, a good way of doing things. It’s a cliché, but people are empowered, they take responsibility and there is not a lot of hierarchy. I don’t think people stay with Södra for 20 years simply because they have nowhere else to go.”

On the challenges ahead, Saltin is still in a settling in period: “My background is mostly technical and I know certain aspects of the company very well, that’s to say the mills. This perhaps gives me a decent perspective from which to prioritize and optimize them. Our production units are more than just that, they are the foundation of our business and everything else falls in place behind them. We are constantly looking at how to optimize productivity and change the things we can influence. There’s not much we can do about exchange rates, for example, but we can keep striving for ever-greater costs efficiencies, energy efficiency and product innovation.”

Södra's key advantage is its integrated wood supply

Södra Cell has had a productivity program in place since 2000 but Saltin says it has been fortunate: “We haven’t been in a position where we’ve had to drastically reduce our workforce, for example. Instead we try to shrink costs literally on a daily basis. We may look at someone who is retiring and ask whether we need a straight replacement or whether we can think more creatively. In 10 years’ time, how will this unit look? Instead of cutting back the workforce, how can we all act on a daily basis – we measure the success of that policy by the number of ideas the whole team generates. Perhaps we are leaner thanks to our policy of gradual, continuous growth rather than large acquisition.”

Energy on the open market

Södra’s key advantage, in the current market climate especially, is the fact that it is integrated with its own wood supply – indeed the pulp arm of the Södra Group was set up precisely to add value and services to its members’ forests. This means that it is insulated from the pressures, for example, of rising export duties on Russian wood, and the fact that it is a non-integrated producer means that it is not vulnerable to fluctuations in the paper price cycle. Saltin has no plans to change that position. “It won’t be any more difficult to continue being focused on market pulp in the future. On the contrary, we’re good at what we do and we believe there will always be a market for our products. It also means that we have a very strong position when it comes to energy,” Saltin reflects.

Södra has made no secret of the fact that energy has become a main focus of its plans for the future and it is no coincidence that the new CEO is one of the best technically-equipped managers to ensure that new energy investments can be implemented to optimum effect. Saltin’s old mill, Värö, looks set to become the first pulp mill in the world to be totally independent of fossil fuels by 2011. The company is making substantial investments in wind power and electricity turbines and it now generates around 15% of its income from selling energy on the open market. This figure is set to rise to close to 35% by 2010. Its policy is simple: Minimize energy consumption and maximize production, make the mill as energy efficient as possible then sell the surplus through as many profitable means as possible, from district heating to biofuel and electricity.

But Saltin recognises that in the longer term, the energy policy will need expanding and Södra Cell is already working on taking wood optimization to the next level. “We have a delicate balance to maintain,” she says. “We are here to make money for our owners but we also have to buy their wood, even when wood prices are high. That means we always feel the pressure to be more efficient. Pulp and timber can co-exist – it makes no economic sense to burn wood immediately – the logical step is to make pulp, then paper and then burn the paper.”

Saltin is in no doubt that environmental consciousness is here to stay and that the next big issue will be carbon footprinting. “Even my kids are talking about it. People still associate the industry with releasing dioxins into rivers from the chlorine bleaching days. This is a very conservative and technically-oriented industry. We think everyone should just understand us and that the public is at fault if they don’t, rather than ensuring that we help them to understand.

“Sodra has been very successful in the past but we can’t rely on the past to guarantee the future in this competitive changing market. We know that, this is why we are constantly striving to improve ourselves. We have to make decisions today to keep our strong position and that means we have to try and see where we will be tomorrow – a certain degree of risk-taking is inevitable but those risks have to be taken in a measured way. In some ways, we have an advantage in not being listed on the stock exchange (and therefore free of shareholder pressure). I don’t think our members go to bed at night dreaming of Södra making a large acquisition, for example. Biggest isn’t always best.”

But if not by major acquisition, how can the company continue to grow? “I keep coming back to energy,” Saltin says. “At least in our existing mills (where oil consumption has been reduced by 16% compared with 2000). We have a separate company now dedicated to expanding our wind power and we have transformed ourselves from a net energy consumer to a fairly significant producer. We are now one of the leading suppliers of bio energy in Sweden and we can now produce 1.8 TWh of energy per year, which is roughly equivalent to the consumption requirement of a city with 250,000 inhabitants. Our mills produce enough energy to power the processes in all our plants, and supply 300 GWh to the national grid. And when we’ve finished investing at Värö, we’ll be selling bark to produce the equivalent of 200 GWh of energy per year.”

Värö: set to become the first pulp mill in the world to be totally independent of fossil fuels by 2011

Strong in wood

Still, the company is not putting all its eggs in the energy basket. “We are also investing heavily in R&D,” Saltin stresses, “product innovation and higher-value grades.” (Saltin is clearly a fan of R&D – before joining Södra, she was with MoDo which had a ‘great R&D department’). “And we will continue to work together with our sawmills in the Södra Group to create further synergies. We have a long tradition in forest products, a good supply of high-quality raw material and good people. Yes, there are threats and increasingly tough competitors out there, but wood supply is crucial and we are strong here.”

The fact that Södra is primarily a softwood producer when hardwood consumption is growing faster does not phase Saltin. “You can see our position as a risk or an opportunity depending on your viewpoint,” she shrugs philosophically. “If we do it right, softwood pulp can become an increasingly niche product for higher-end applications. We are certainly moving away from the commodity end of the business and into more demanding applications for speciality and tissue customers.”

It’s too early to say what impact Saltin’s appointment will have on the company – she is still finding her feet at head office and waiting for the rest of the family (husband and two children aged 12 and 9) to follow from Värö. Does being a female CEO in a predominantly man’s industry concern her? Not in the least. “Professionally, I’m practically a man myself,” she giggles. “I’ve been in the industry 20 years and my background is rather technical,” she smiles. “Besides, there are actually more women in our HQ than in our mills. I may be the only CEO but there are women in very senior managerial positions in other pulp and paper companies which are much bigger than ours, I’m not the only one.”

Is it good to have the big office with the comfy chair? “Of course, but I do miss the smell of pulp! I really do. Although I get plenty of occasions to go back into our mills, something happens all the time in a pulp mill…”

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