With the aim of enhancing the continuous growth of profitability, changes in Vapo Group are progressing in accordance with the current strategy. The changes support the previously announced plans concerning the structure and operations of Vapo’s Energy division. The strategy is focused on growing the business in industrial and municipal infrastructure solutions and renewables.
Vapo revised its strategy in spring 2018. The targets specified at the time were expansion in the international growing media markets, developing new products from peat and investing in renewable fuels, digitalisation and services in the energy business. Investing in businesses that support sustainable development enables the Group to make determined progress in reducing its dependence on energy peat. At present, energy peat and energy produced from peat account for approximately a quarter of the Group’s turnover.
Good progress has been made in the implementation of the strategy. In autumn 2018, Vapo announced a transaction that saw the Finland-based growing media producer Kekkilä Oy and the Netherlands-based BVB Substrates join forces to become the leading player in professional growing media in Europe. Kekkilä-BVB’s annual turnover is approximately EUR 240 million and is products are exported to more than 100 countries. Vapo is currently building its first activated carbon production plant in Ilomantsi. Vapo’s target is to expand its role in the market for high added-value products that include, among others, activated carbon and other high added-value products manufactured from peat, such as various fibres, waxes, resins, sugars and humic acids.
Growth in the energy business through specialising in renewable energy and advanced solutions
Vapo is now restructuring its energy business to expedite growth in renewables and the provision of municipal and industrial infrastructure solutions. Vapo will consolidate all assets and personnel primarily involved in the industrial and municipal infrastructure business into one entity under one name. The new company will assume responsibility for the heating production and district heating business and customer operations in Finland, Sweden and Estonia. The company’s turnover at the time of starting its operations is approximately EUR 100 million and it has 125 employees. Effective from 1 November 2019, the Managing Director of the new company will be Markus Hassinen, who was previously in charge of Vapo’s Energy division. Hassinen will continue as a member of Vapo Oy’s Group Management Team and he will report to Vapo Group CEO Vesa Tempakka.
Investments in biofuels, land ownership and evaluating the wind power business
In Vapo’s businesses related to biofuels and energy peat, the target is to increase the market share in renewable fuels, such as wood chips, pellets and intermediary services for by-products and recycled wood. As part of its investments in renewables, Vapo has evaluated opportunities for taking advantage of wind power. This is linked to Vapo’s ownership of 80,000 hectares of land. In the first phase, the company will select locations for wind farm planning and permit application processes in areas released from production. The company is not excluding the possibility of building wind farms itself. Effective from 1 November 2019, Pasi Koivisto has been appointed as the Director of the business consisting of the sale of renewable energy and fuels. Koivisto will also continue as the Director in charge of the Group’s real estate. As part of assuming the new responsibilities, he will join Vapo’s Group Management Team and report to the Group CEO.
According to CEO Vesa Tempakka, the target is to achieve progress in business that supports sustainable development while also improving profitability. “I believe that, in ten years’ time, our role will be focused on solutions that develop well-being in society and, following the controlled reduction of the use of energy peat and the growth of new businesses, the percentage share of the Group’s turnover represented by energy peat will be down to single figures,” Tempakka says.
More information: Vesa Tempakka, CEO, Vapo Oy, tel. +358 40 072 6727