“I grew up with the forest,” says Lotta Lyrå, the new president and CEO of Södra. “It is part of Swedish culture and it means a lot to me. I started to work with forestry after business school, inspired by both the people and the business itself. Then I met my husband, whose family have been forest owners for generations. We lived on the family farm when we first met. Today, the farm is still a family business that my husband manages.”
While her relationship with the forest may have a distinctly personal element, there is no doubt that, where Södra is concerned, the forest means business for Lyrå. She recognizes that the interests of Södra’s 53,000 forest-owning members can only be served if they remain relevant for the end user.
“Our owners have a long-term view of their forest assets. Our job is to optimize that resource and, in doing so, we create value for all our stakeholders. We cannot optimize that base without being focused on our customers and understanding what drives customer value. If we minimize the distance between our customers and forest owners, and keep Södra relevant to our customers, we create value for our owners.”
HOME IS WHERE THE HEART
(AND BUSINESS) IS
How does she intend to create that value? First, by building on what Södra knows. “As a company, brand, and human being, one should build from strength,” she remarks. “Our strength is our asset base in southern Sweden, both raw material and infrastructure, and that is what we should continue to leverage.”
When it comes to the possibility of expanding abroad, Lyrå is clear: “Sweden will always be our core. There will be other opportunities to grow, but our strength is very much here.
“In terms of geography, our main markets will remain those closer to our asset base. Europe is and will continue to be the primary focus. But China remains the global driver for pulp consumption and cannot be ignored. In addition, our customers have become increasingly global. It’s important that we can serve them on a global scale, delivering what they need, when they need it and to whichever mill they designate. Our local agents in Asia are an invaluable aid in this respect and we continue to put a lot of effort into maximizing efficiency in logistics, which is a key component of competitiveness in a global marketplace.
“Asia is especially important for our textile pulp. We are building a loyal customer base there, in addition to the excellent relationship we have with our main customer in Europe.
“In terms of grades, we know that the market for graphic papers is in long-term decline and that COVID-19 has exacerbated the trend; some of the decline in demand we have seen in recent months won’t be coming back. We were already selling 70 percent of our pulp for tissue and specialty applications before the pandemic, compared to 35 percent 20 years ago, and we expect this to continue.
“But there will also be more opportunities in the future, in smart packaging for example,” she adds. “Perhaps new high-value applications that don’t yet exist, where paper will replace less sustainable alternatives. This is one of the reasons we invest so heavily in research and development. We are only at the start of what the forest can do to help steer us toward a more sustainable future. It’s why we want to encourage more partnerships with our customers, too, so we can work together to deliver smarter, more sustainable paper and board solutions for the future.”
STRENGTH IN NUMBERS…
Lyrå spent a decade in the retail sector, at Ikea and Clas Ohlson. One of the lessons she learned is the importance of “linking arms” across the value chain.
“Working with consumer-facing brands was very positive for me. Ikea is particularly good at working throughout the value chain, from raw material to consumer. I share this philosophy as part of a strategy to innovate for a more sustainable future,” she says. “We are strongest as a value chain. We need to gather the input and take it all the way back. A quality value chain and close relationships speed up the process of adapting to change. COVID-19 has shown us all how important that can be.”
…AND IN DATA
“The same is true for digitalization,” says Lyrå. “We are already working on this, but there is huge potential to connect the dots when it comes to data from forest to end consumers. Adding this to a smarter use of fiber means enhanced profitability for us all.”
Her starting point for engagement with others, from the consumer to NGOs, is simple but effective: “We have two ears and one mouth. Very few problems are solved by polarization. Work together, allow for different opinions, and respect them. None of us is more successful than our customers; we are part of each other’s success.”
A FIGHTING CHANCE FOR THE PLANET
Lyrå is keen to emphasize that the inherently sustainable nature of the business means opportunity. “Södra has long held the values of sustainable forest management at its core, but now it’s more important than ever. I’ve been a member of the board at SCA for several years and have seen it happening there. But it really struck me when I re-joined Södra. Today, the potential of our sector to influence climate change is the major driving force behind our strategy. This is both exciting and inspiring.”
She sees sustainability as a vital ingredient for attracting future talent to the industry, an issue that remains close to her heart. “We have a fantastic pitch here: We’re asking young people to join a movement to increase the lung capacity of the planet. That’s a pitch with a lot of power, which should attract the best talent. Once with us, they need to be nurtured and encouraged to feel they can make a difference.
“Sustainability is about the planet, society, and people. It’s about how we together use the Earth’s resources wisely and how we develop more sustainable solutions for everyday life. For Södra, it’s also about how we together support our 53,000 members in rural southern Sweden in developing their forests in the best possible way.”
WHERE TO NOW?
And what of the pandemic—has that changed Södra or its outlook? “It remains to be seen how much of the ‘COVID-19 effect’ will stick,” Lyrå says. “We are analyzing this continuously to adapt accordingly. Södra is already very well-positioned, having reduced our focus on printing and writing producers in recent years and having a strong (but far from exclusive) focus on tissue customers, as well as investing in dissolving pulp and textile applications. Green energy will also be increasingly important in our mix.
“COVID-19 has fuelled trends that were already there. Some are moving faster than we thought, but not in a completely different direction. There are so many interesting new things on the table, both liquid and solid biomaterials, and they create a lot of value.”
For the longer term, Lyrå tells us that her mission is clear. “My job is to ensure that my eventual successor will find Södra in the best of health, having strengthened its position as a sustainable business and contributor to a more balanced climate. The biggest challenge is making sure we grow in a sustainable way. The entire value chain needs to grow together — from seed to customer. We need to keep nurturing the best forest management practices and growing the business in balance.
“I feel privileged to be leading a company that can play a vital role for a more sustainable future. I believe in Södra’s culture and everything it stands for. It’s important being focused on the long-term success of the business rather than oneself.”