Holmen

Holmen

Holmen’s business concept is to own and add value to forests. The forest holdings constitute the basis for the operations, forming a sustainable cycle whereby raw materials grow and are processed into everything 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 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 supplies the Swedish production units. The forest is a stable source of revenue for Holmen and contributes significant climate benefits by binding carbon dioxide. When renewable forest raw materials replace fossil- based alternatives, the climate benefit is doubled. The revenue and value of the forest are to be increased through active, sustainable forestry in which the harvest is utilized and processed into climate- smart products.

Board and Paper develops products based on virgin wood raw materials in a largely fossil-free production process. The business for consumer packaging and paper products is to be developed based on the position as market leader and by offering resource-efficient alternatives to traditional products. Solid board and folding boxboard are produced at one mill in Sweden and one in the UK, with the products marketed under the Invercote, Incada and Inverform brands. 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 grades 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 the company’s own forests. Holmen also offers customized solutions for climate-smart, large-scale timber construction. The positioning of the sawmills close to sea, rail and road enables efficient logistics solutions for customers. The operations are to be developed through increased processing and improved utilization of timber raw materials in combination with large-scale production.

Renewable Energy accounts for the Holmen Group’s hydroelectric and wind power assets, as well as electricity supply to Holmen’s Swedish units. In a normal year, Holmen supplies 2.2 TWh of renewable electricity from hydro and wind power. Together with electricity production at the mills, hydro and wind power currently account for approximately 60% of the Group’s electricity consumption. Holmen’s production of renewable hydroelectric and wind power contributes to a sustainable energy supply in Sweden and to the European transition towards fossil-free energy sources. 

Sustainability

Holmen’s business model is circular, with sustainably managed forests as its foundation. The forest is managed to produce as much timber as possible while taking biodiversity into account. The timber is processed in the company’s own industrial operations into renewable products, helping to reduce the need for fossil- based alternatives. All paperboard and paper mills are certified for 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 in the atmosphere. Holmen’s business creates value for both shareholders and customers while contributing to a better climate and a living countryside.

Financial objectives

The forest is managed sustainably to generate a good annual return and stable value growth. Growth and harvesting are to increase over time. The production of renewable energy is to increase by complementing existing 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 of sustainably achieving a return on capital employed of more than 10%. Financial net debt must not exceed 25% of shareholders’ equity. Holmen aims to provide a good annual dividend to its shareholders. The level is adapted to the Group’s profitability, investment plans and financial position. Dividends are complemented by share buybacks when this is considered to create long-term value for shareholders.