"In 2007 our stock of orders broke all records. Now the focus is on delivering high quality solutions with good levels of profitability both for ourselves and our clients."
Eero Auranne, Divisional President
- TABLES
- Key figures
- GRAPHS
- Share of sales
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The Process Division offers technical consulting services for clients in the energy sector and process industries, chiefly in the pulp & paper industry. Acquisitions in 2007 strengthened the division’s energy consulting business substantially, making ÅF one of the largest European consultants in its sphere and a world leader in the field of nuclear power. Consulting activities in pulp & paper extend worldwide. The Process Division accounts for 24 percent of ÅF Group sales.
Process – realignment and strong growth in energy
2007 saw the realignment of business in the Process Division, with a new organisation that focuses on two markets: the energy sector and pulp & paper industry. The division’s most important asset is the breadth of its experience in technical consulting assignments and its capacity to deal with complex projects. Operations are international in scope at the same time as they have strong local roots.
In the energy sector, the division is a market leader in Sweden, Finland, Switzerland and the Baltic states, and business is growing rapidly in Russia and South-East Asia. The acquisition of the Swiss energy consultant Colenco has substantially reinforced the division’s position in Europe and South-East Asia, particularly in the areas of nuclear power and hydropower. Today ÅF is one of the largest independent international companies in energy consulting and enjoys a position as a world leader in nuclear power. The division is one of Europe’s leading consultants in the field of conventional power generation and has secured a strong position in renewable energy, where it is the number one name in consulting for biofuel power plants in Sweden, Finland and the Baltic region.
In the pulp & paper industry, which for the most part consists of global players, the division is among the world’s top five technical consulting companies. Process Division consultants are currently involved in major projects in Europe, South Africa and Asia.
In terms of revenues, approximately 20 percent of business derives from projects in Sweden, while there is a 75:25 percent ratio between energy and pulp & paper assignments.
The division has around 30 offices in 20 countries, a total of approximately 800 permanent employees and more than 100 others who are currently employed on fixed-term contracts to work on special projects. Projects are currently being carried out in more than 50 countries. The greater part of the division’s resources are concentrated in Finland, Sweden and Switzerland. 25 percent of the workforce is based in Sweden.
Offer – consulting services for the entire investment phase
In the energy sector clients’ needs include project engineering services for new power plants, the upgrading of existing facilities and help with environmental adaptation. Pulp & paper industry clients, for example, may commission the Process Division to plan new production lines or to make more efficient use of existing production lines.
The division offers consulting services for the entire life cycle of an investment: analyses and feasibility studies in the early phases, pre-engineering and engineering once a decision to invest has been taken, and overall project management on behalf of the client during the implementation phase, which can include services such as project control, the basic design of process solutions, procurement negotiations, design review, manufacturing inspections, installations inspections and functionality testing. During the life cycle of the plant the division can assist with a number of services from trouble-shooting to maintenance planning. The division also offers consulting services that are not directly linked to investment projects, such as investigations, environmental reviews, safety studies, and capacity-expansion programmes.
Clients – big projects, long-term relationships
Clients are industrial companies, private and publicly owned energy companies, banks, investment companies, public institutions and aid organisations. Investments are often large-scale and extend over many years, and as the Process Division is involved in these projects from an early stage, it is natural for relationships with the client to be both close and long-term. The division enjoys a good reputation among its clients, and cooperation is characterised by a sense of partnership. The division always scores well in the regular customer surveys that are carried out.
The division’s biggest clients in the energy sector include Atel, Fortum, TVO, Eesti Energia, Russian energy companies, Suez and power companies in South- and South-East Asia.
Major clients in the pulp & paper industry are Holmen, EMCE, Mercer, Mondi, Portucel, Sappi and Stora Enso.
2007 – realignment, expansion and new assignments
The past year saw the completion of work to realign the division’s business operations. The division’s own mechanical construction and design operations were, in part, transferred to the Engineering Division and, in part, sold off. Part of the Finnish subsidiary ÅF-CTS Oy and the French subsidiary ÅF-Chleq Froté were sold to the respective company’s management teams.
In the third quarter ÅF acquired all the shares in the Swiss energy consulting company Colenco with 250 employees in Europe and Asia and ongoing projects in the company’s focus areas of nuclear power, hydropower, electrical networks and conventional power plants.
A South American subsidiary was set up during the year to reinforce the division’s local platform in the pulp & paper industry.
Thanks to a large order intake in 2007, the division’s order books have never been fuller. Over the past year the division has won major consulting contracts for, for example, a new district-heating plant and a new peat and biofuel-fired heating plant in Finland, a new heating facility in Tartu, Estonia, and a project management assignment at the Illisu hydroelectric power complex in Turkey.
Market and trends – very promising prospects in energy
In 2007 the market was very strong in all energy-related areas, particularly in renewable energy and nuclear power. The situation is expected to remain much the same as the global energy shortage creates huge needs for investment.
In the pulp & paper industry demand was high with regard to chemical pulp projects in 2007 and this trend is expected to continue. Economic expansion in Asia is generating local investments in pulp & paper, while the relatively low costs of raw materials in South America are attracting investors to build new pulp and paper mills there. Growth in Europe remains modest by contrast, where investments relate primarily to environmental improvements and the rationalisation of existing facilities.