|Traded as||OMX: MEO1V
|Predecessor(s)||Valmet, Rauma Oy|
|Key people||Jukka Viinanen (Chairman), Matti Kähkönen (President and CEO)|
|Products||Machinery and services for the process industries, including mining, construction, pulp and paper, energy and oil and gas|
|Revenue||€7.504 billion (2012)|
|Operating income||€684 million (2012)|
|Total assets||€6.642 billion (end 2012)|
|Total equity||€2.227 billion (end 2012)|
|Employees||30,212 (end 2012)|
Metso is a supplier of technology and services to customers in the process industries, including mining, construction, pulp and paper, power, and oil and gas. Metso has 30,000 employees based in over 50 countries. Metso Corporation was created in 1999 through the merger of Valmet and Rauma  and is headquartered in Helsinki, Finland. Metso consists of three reporting segments: Mining and Construction, Automation and Pulp, Paper and Power. Metso´s top competitors are Andritz AG, Voith AG and Sandvik Aktiebolag.
- 1 History
- 2 Organization
- 2.1 Corporate governance
- 2.2 Metso Pulp, Paper and Power
- 2.3 Metso Mining and Construction
- 2.4 Metso Automation
- 2.5 Other businesses and separate entities
- 3 Share
- 4 Divestments
- 5 Recognitions and awards
- 6 References
- 7 External links
Even though Metso Group is still relatively young, its roots date back to the 1750s in Helsinki, where a small shipyard in Suomenlinna operated in the 1900s. In the 1900s the shipyard was transferred as part of Valmet to the ownership of the State of Finland. Tamfelt which was acquired in 2009 was also founded in the 1700s.
Metso was created on 1 July 1999 through the merger of Valmet, a paper and board machine supplier, and Rauma, which focused on fiber technology, rock crushing and flow control solutions.
In 1998 Rauma’s businesses included:
- Timberjack forest machines
- Sunds Defibrator fiber technology equipment
- Nordberg rock crushers
- Neles Controls valve-control systems
The new company had overlapping operations and to some extent the same customer base too. The purpose of the merger was the will to grow particularly in process technology. For a bigger company it seemed to be easier to survive better in international markets. The company’s scope of business became more diversified than before and there were critics of the merger saying that easier growth would have been achieved if the two companies would have each acquired a competitor in their own core business sector. Matti Sundberg who was the President and CEO in Valmet and then the CEO of Metso has later said that he had wanted to implement the merger in different way. He would have liked to emphasize more the strengthening of Valmet’s core business, the paper machine side, as the goal of the merger. Heikki Hakala who was the President and CEO of Rauma became the new President of Metso. The company’s beginning was sluggish and the first year’s financial result was quite modest. The collaboration and exercising of power between Hakala and Sundberg did not work. Hakala, who was slated as Sundberg’s “right hand,” reported to the Supervisory Board chaired by Pertti Voutilainen.
The new company had offices in 50 countries and 32,000 employees after a personnel reduction of 2,000 people, and it operated in four sectors:
- Paper machines
- Forest machines (divested in 2001)
- Fiber technology
- Rock crushing plants
The name for the new company was sought in an employee contest. There were 3 suggestions for the name Metso among the total 6500 suggestions. All the three who had suggested the name Metso received a monetary prize. Metso is the Finnish word for Wood Grouse, also known as The Western Capercaillie (Tetrao urogallus), Heather Cock or Capercaillie. Wood Grouse is found across Europe lives e.g. in Finnish pine forests. Metso’s logo mimics the shape of the wings of a Wood Grouse.
Sundberg and Hakala did not stay that long in Metso’s management. Tor Bergman became the new President and CEO in 2001. Metso’s net sales were EUR 4.7 billion, and it had 28,500 employees in 2001.
One of Bergman’s first efforts in Metso was to highlight its values and ethical principles, putting special emphasis on shareholder value. A socially acceptable company is more efficient and thus brings more value to its owners. According to Bergman’s management philosophy Metso’s operational core was technology leadership along with creating and developing competence clusters.
The new Metso Group was divided into three business areas:
- Fiber and Paper Technology
- Automation and Control Technology
The merger had given direction to the company’s future focus on
- Pulp, paper and energy production technologies
- Equipment needed for the construction, mining and recycling industries
- Automation and control systems for the process industry
This formed Metso’s three main business areas: Metso Paper, Metso Minerals and Metso Automation.
The aim of the plethora of business acquisitions made in the 2000s was to expand the product and services portfolio of Metso Paper and Metso Automation. Business operations outside the core businesses were divested. For example, in 2000, Metso acquired the roll cover business and paper machine servicing operations, including paper machine technologies, from the American paper machine manufacturer Beloit (corporation), and the American John Deere aka Deere & Company acquired the forest machine manufacturer Timberjack from Metso. In 2001, Metso acquired the Swedish Svedala Industri AB, a manufacturer of rock and minerals processing equipment.
In 2002, Metso announced that it would not achieve its profit targets for two years, and a loss in excess of EUR 300 million was recorded for July–September. The reason for difficulties was Svedala. In 2003, a loss of over EUR 200 million was recorded and in September 2003, President and CEO Bergman was forced to resign because of the company’s poor results. Jorma Eloranta was selected as his successor and he started in March 2004. Eloranta started by distancing the goals and the reality from one another within the Metso organization, where the implementation of the plans and the strategy had begun. Managers were given clearly defined goals, responsibilities and timetables; the company’s structure was strongly streamlined. These measures cut annual costs by EUR 150 million. From 2004-2007, Metso’s net sales increased from EUR 3.6 billion to EUR 6.3 billion, and the profit margin rose from 5.5 percent to 9.3 percent.
During Eloranta’s tenure, Metso increased its net sales and improved its financial performance for 19 consecutive quarters (2004-2008). By 2008, Metso had grown to become Finland’s ninth largest company, surpassing other engineering companies like Kone, Wärtsilä and Cargotec.
Metso’s business functions had divided into three sectors (Metso Paper, Metso Minerals and Metso Automation) with over 28,000 employees and net sales of EUR 6.4 billion. In fact, at that point, it was Metso’s best year ever in terms of operating profit and net sales, but the rapidly weakened market situation in the second half of the year forced Metso to initiate sizable measures to adjust its operations.
In August 2010, Matti Kähkönen, Master of Science in Technology, was appointed the new President and CEO. He previously headed Metso’s Mining and Construction division.
In September 2012, Metso announced the need for a personnel reduction of more than 600 Finnish employees in several of its units serving the paper industry and paper production. The reason for the reductions is the weakening of paper business unit’s competitiveness and profitability: competition has increased, demand for paper machine and foundry products has weakened. Customers also want cheaper solutions than before. Metso had planned to give extra dividend for its shareholders but after the decision of paying dividends while cutting staff was criticized e.g. by personnel and the Finnish politics the decision was cancelled.
The Extraordinary General Meeting approved the demerger of Metso into two companies on October 1, 2013. After the demerger in the beginning of 2014, Metso's Pulp, paper and power business will form a new company Valmet corporation and Mining and Construction and Automation business will form the continuing operations of Metso Corporation.
Metso is a technology and services supplier. Today the company’s operations are divided into three business areas, i.e. reporting segments:
- Metso Pulp, Paper and Power, consisting of the Paper, Fiber, Power and Services business lines
- Mining and Construction, consisting of the Minerals Processing Solutions, Crushing and Screening Equipment, and Services business lines
- Metso Automation, consisting of the Process Automation Systems, Flow Control, and Services business lines
Metso’s President and CEO as well as Chairman of the Executive Team is Matti Kähkönen.
Metso’s Board of Directors
Metso’s Board includes the following members (since March 28, 2013 ):
- Jukka Viinanen (Chairman since 2009, Board member since 2008)
- Mikael von Frenckell (Vice Chairman since 2012, Board member since 2010)
- Christer Gardell (2006-)
- Ozey K. Horton, Jr. (2011-)
- Erkki Pehu-Lehtonen (2010-)
- Pia Rudengren (2009-)
- Eeva Sipilä (2012-)
- Mikael Lilius (2013-)
- Personnel representative on Metso’s Board: Eija Lahti-Jäntti
Metso Executive Team
The Executive Team includes the following members (May 2013):
- Matti Kähkönen, President and CEO
- Harri Nikunen, CFO
- Andrew Benko, President, Mining and Construction
- Perttu Louhiluoto, President, Automation
- Pasi Laine, President, Pulp, Paper and Power, Metso’s Executive Vice President and Deputy to the CEO
- Merja Kamppari, Senior Vice President, Human Resources
- Kalle Reponen, Senior Vice President, Strategy and M&A
Metso Pulp, Paper and Power
Metso Pulp, Paper and Power is one of world’s leading manufacturers of forest industry machines and equipment. It was formerly known as Valmet Paper Machinery. Through this segment, Metso offers processes, machinery, equipment, services, paper, machine clothing and filter fabrics for the pulp, paper and power generation industries. The offering covers the entire process life cycle including new production lines, rebuilds and services.
The segment consists of four business lines: Paper, Fiber, Power, Services. It is a global supplier of pulpmaking, papermaking, boardmaking and tissuemaking lines, covering all the processes from pulp making to the wrapping of finished rolls. Metso has supplied over 1,500 paper machines and equipment for 800 pulping lines to customers worldwide.
In the first half of 2009, Metso laid off over 700 employees and shut down several small units in e.g. Tampere, Turku, Oulu and Hollola. The operations of the shut-down units were integrated with the Järvenpää and Jyväskylä units. Metso’s strategy for the 2000s was to manufacture wide, high-speed paper machines and discontinue its traditional paper machine concepts.
In 2012 Metso's Pulp, Paper and Power segment's net sales were EUR 3,014 million and the biggest of the business lines was Services with net sales of EUR 960 million followed by Paper (EUR 876 million), Power (EUR 875 million) and Fiber (EUR 448 million). In 2012, it had a personnel of 12,439. Europe, South and Central America, Asia and North America were all large market areas for the segment.
Products and services
In addition to spare parts and expert and maintenance services, the Metso Pulp, Paper and Power business area offers its customers:
- Chemical pulping lines and equipment
- Mechanical pulping lines and equipment
- Paper and board making lines, machines and rebuilds
- Tissue making lines, machines and rebuilds
- Power boiler plants and chemical recovery boilers, evaporators, flue-gas cleaning and environmental systems, boiler rebuilds and upgrades, biomass power plants
- Expert and maintenance services
- Fabrics and filters for the pulp, paper, energy and mining industries
The business area’s customers include:
- Paper, board and tissue producers
- Chemical and mechanical pulp producers
- Industrial power generators, municipalities and utility companies
Metso’s paper machine business has been created by acquiring/merging the following companies with Metso Paper or its predecessor Valmet Paper Machinery:
- Canadian Dominion Engineering Inc
- Karlstads Mekaniska Werkstad KMW (today Metso’s Karlstad unit)
- Tampella Paper Machinery
- Wärtsilä Paper Machinery (today Metso’s Järvenpää factory)
- A. Ahlström Oy’s paper machine manufacturing (Karhula Oy, later Metso’s Karhula unit, since sold to Mesera Corporation)
- Beloit’s paper machine technology
- Mitsubishi’s paper machine technology
- Rotomec S.p.A.
- Tamfelt Oyj
- Other, smaller acquired companies
Metso’s most significant competitors in the pulp and mining industry sector since the bankruptcy of the American Beloit in 1999 are the Austrian Andritz AG and the German Voith Paper. Metso gained its paper machine know-how through Valmet’s paper machine factories. In 2008, Metso acquired Mitsubishi’s paper machine operations and Mitsubishi’s share of Beloit’s paper machine technology, which the companies acquired jointly from the bankruptcy estate of the American company in 2000.
Metso Mining and Construction
Metso Mining and Construction supplies technology, processes, machinery and services for aggregates production, construction, mining and minerals processing. The business lines are Minerals Processing Solutions, Crushing and Screening Equipment, and Services. The biggest of the business lines in 2012 was Services (net sales EUR 1,692 million). Net sales of Minerals Processing Solutions were EUR 1,317 million, and the Crushing and Screening Equipment business line EUR 477 million the same year. The business area includes, among others, the Swedish Svedala Industri AB units acquired in 2001 and the former Oy Lokomo Ab factories in Tampere.
Metso’s Process Technology Center in Colorado Springs, Colorado USA, is developing virtual machines based on sophisticated multi-physics models. The use of this technology is rare within the mining industry, making Metso the leader in simulating these complex problems.
Products and services
In addition to spare parts and expert and maintenance services, the business area offers its customers 
- Full-scope solutions for the mining industry
- Grinding mills and grinding solutions
- Crushers, crushing solutions, process equipment, such as pumps, filters, thickeners, separation equipment
- Mobile crushers and screens
- Bulk materials handling solutions and conveyors
Metso Mining and Construction is among the market leaders in grinding mills, mining crushers, and in crushing and screening plants for the construction industry. Its biggest competitors in the mining industry include FLSmidth, Outotec and ThyssenKrupp, and in the construction industry Terex, Atlas Copco, Caterpillar and Sandvik.
Metso Automation supplies process industry flow control solutions, automation and information management systems and applications, and services. The business sector was formed in 1999 through the merger of the process automation systems manufacturer Valmet Automation and Neles Controls, a manufacturer of valves and flow control systems.
It consists of three business lines: Process Automation Systems, Flow Control and Services. In 2012, the biggest of the business lines was Flow Control (net sales of EUR 449 million). In the same year, the Services business line’s net sales were EUR 217 million, and Process Automation Systems business line’s EUR 194 million.
Products and services
In addition to expert and life-cycle services, the business area offers its customers 
- Process automation and information management application networks and systems
- Process measurement systems and analyzers
- Control, on-off and emergency shutdown (ESD) valves
- Intelligent positioners and condition monitoring
The business area’s customers operate in the power generation, oil, gas, pulp, paper, mining and construction industries.
Metso’s competitors in automation systems include ABB Group and Honeywell, and in valves Emerson Process Management, General Electric and Flowserve. Metso Automation is a market leader in valves and automation solutions for the pulp and paper industry.
Other businesses and separate entities
Valmet Automotive provides automotive engineering, vehicle manufacturing, convertible roof systems and related business services. It has expertise in premium cars, convertibles and electric vehicles. In 2012, the company employed 1,700 people in Finland, Germany, Poland, Sweden, China and the USA.
Metso Recycling business line offers metal and waste recycling equipment and services globally. On September 1, 2011, Metso announced that the Recycling business would be managed as a separate entity while Metso reviews other strategic alternatives for it. As part of this process, Metso evaluated both external and internal options. On October 25, 2012, Metso announced that Metso Recycling will be integrated into Mining and Construction as of December 1, 2012.
Metso’s share is listed on the Helsinki Stock Exchange. The share was previously traded also on the New York Stock Exchange, but the listing there ended on September 14, 2007 and now it exchanged on the over-the-counter (OTC) market.
Metso’s biggest registered shareholders on April 30, 2013 were:
- Solidium Oy 11.1%
- Cevian Capital Partners Limited 8.32%
- Varma Mutual Pension Insurance Company 1.9%
- Nordea Funds 1.7%
- Ilmarinen Mutual Pension Insurance Company 1.7%
- The State Pension Fund 1.4%
- OP Funds 1.1%
- Mandatum Life Insurance Company Limited 1.1%
- The Local Government Pensions Institution 1.0%
- Nominee-registered shares accounted for 48.2% of the total shares.
In September 2008, Metso sold 83% of its foundry in Sweden to an investment group assembled by the Primaca investment company. The foundry employs 120 people. The price was EUR 15 million. The Metso Foundries Karlstadt unit specialized in casts of wind power components, diesel engine blocks and Yankee cylinders for paper machines. Metso sold the company because its biggest growth potential is in the wind power sector and according to the company, wind power is not part of Metso’s core businesses.
Other divestments since 2008 have included the following:
- Shanghai-Neles Jamesbury Valve Co ltd in China in 2013
- Metso Husum AB in Sweden in 2013
- Flexowell conveyor belt operations in Germany in 2010
- Metso Paper Turku Works in Finland in 2009 
Recognitions and awards
In 2012, Metso employee Mika Viljanmaa, received the SEK 2 million Marcus Wallenberg Prize, which is often dubbed “the Nobel Prize of the forest industry”. Viljanmaa is a prolific innovator who has a total of 120 protected inventions, 57 of them related to metal belt technology. He received the prize for his groundbreaking development of metal belt calendering used in paper and board making. Metal belt calendering technology improves the surface properties of paper, increases production efficiency, lowers the use of fiber raw materials, and enables pressing and drying applications. Compared to conventional calendering, metal belt calendering produces a smoother finish on paper and board. The initial research and tests with the technology were conducted in 1996–2000, and the first application was deployed in 2006. Today the global production capacity based on the technology is 2.2 million tons per year.
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