Holmen

Holmen

Holmen’s business concept is to own and add value to forests. The forest holdings constitute the basis for the operations, which form a sustainable closed circuit whereby raw materials grow and are processed into every-thing from wood for climate-smart construction to renewable packaging, magazines and books. In addition, hydroelectric and wind power is generated on land owned by the company.

Business areas

Forest is responsible for the management and development of Holmen’s forest holdings and for the efficient supply of timber to the Holmen group’s Swedish production units. Holmen’s land holding amounts to just over one million hectares of productive forest land in Sweden, and harvesting in wholly owned forests largely satisfies the Swedish production units. The forest is a stable source of revenue for Holmen and contributes considerable climate value by binding carbon dioxide. The climate value is doubled when the renewable forest raw materials are used  to replace fossil-based alternatives. The revenue and value of the forest will increase through active, sustainable forestry in which the harvest is utilized and processed into climatesmart products. 

Paperboard and Paper develops products based on virgin wood raw materials in a largely fossil-free production process. Solid board and folding boxboard are produced at a mill in Sweden and one in the UK, with the products marketed under the Invercote, Incada and Inverform brands. Paperboard operations will grow on the basis of the position as market leader in the premium renewable consumer packaging segment, in which high quality, customized solutions and first-class service are combined with large-scale production. Paper products are manufactured at two Swedish mills. Here, the properties of the virgin fiber are utilized, providing cost effective and resource-efficient alternatives to traditional paper choices for books, packaging and graphic publications. 

Wood Products supplies sawn and processed wood products for the construction trade, carpentry and construction industry at five sawmills located close to own forests. Holmen also offers customized solutions for climate-smart, large-scale timber construction. The positioning of the saw-mills close to the sea, railways and roads facilitates effective logistics solutions to customers. The operations will be developed through increased processing and better utilization of timber raw materials in combination with large-scale production. 

Hydro and wind power accounts for the Holmen Group’s hydroelectric power and wind power assets, as well as electricity supply to Holmen’s Swedish units. In a normal year, Holmen generates around 1.8 TWh of renewable electricity. Together with the electricity produced at the mills, the production of hydroelectric and wind power currently accounts for approximately 60% of the group’s electricity consumption. Holmen’s production of renewable hydroelectric and wind power contributes to sustainable energy supply in Sweden and to the European transition to fossil-free energy sources. 

Sustainability

Holmen’s business model is circular, whereby the foundation is the company’s sustainably managed forests. The growing trees are processed in the company’s own industrial facilities into everything from wood for climate-smart construction to renewable packaging, magazines and books, at the same time as hydroelectric and wind power electricity are generated on the company’s own land. All paperboard and paper mills are certified to guarantee traceability, environmental standards and quality. The operations as a whole, with in-house energy production and resource-efficient production units, contribute to long-term value growth and significant climate benefits by annually reducing the amount of carbon dioxide released into the atmosphere. Holmen’s business creates value for both shareholders and customers while contributing to a better climate and a flourishing countryside.  

Financial objectives

The forest is managed sustainably to pro-vide a healthy annual return and stable value growth. Hydroelectric and wind power will promote sustainable energy generation and the production of renewable energy will be increased by supplementing current hydroelectric power with wind power on the company’s own land. Industrial operations are conducted with a focus on long-term profitability and the objective is to sustainably achieve a return on capital employed of more than 10%.  

Financial net debt must not exceed 25% of shareholders’ equity. Holmen aims to generate a favorable annual dividend to the shareholders. The level is adapted to the group’s profitability situation, invest-ment plans and financial position. Divi-dends are complemented with share buy-backs when this is considered to add long-term value for the shareholders.