Not many people can say they’ve wandered through the Swedish wilderness with Apple CEO Tim Cook. But Henrik Sjölund, President and CEO of forest industry group Holmen, can. For 12 years, Apple has been a secret customer of Iggesund Paperboard, one of Holmen’s five business divisions. The iconic tech company uses Iggesund’s sustainable packaging for the boxes of its products.
It was only last year that the partnership was revealed when Tim met with Henrik and representatives from Iggesund to tour its Hälsingland factory and visit Östersund, the sustainably managed forest Holmen is famous for. Tim even planted his own tree, eager to follow the entire process from forest management to finished packaging.
“It was actually Apple’s founder Steve Jobs who chose Iggesund as their supplier. He looked at a collection of packaging samples from around the world before he pointed to our Invercote material and said, ‘We want that one’. Because we weren’t allowed to tell anyone, for more than a decade we referred to Apple internally as ‘the fruit company’,” laughs Henrik.
“Because we weren’t allowed to tell anyone, for more than a decade we referred to Apple internally as ‘the fruit company’.”
One of the most famous packaging firms globally, Holmen is repeatedly ranked among the world’s most sustainable companies, planting more than 30 million tree seedlings annually to meet Sweden’s legislated requirements for replanting after felling. After almost 20 years in the paper business, Henrik stepped into the role of Managing Director at Holmen Paper in 2011, amid a steep decline in the industry following the fall of financial services firm Lehman Brothers. It was his passion for innovation and sustainable thinking, and his penchant for leadership that earned him the role of Holmen Group CEO three years later.
“We made our forest the core of our business.”
“When I took over, the company was still focused on minimising risks to survive. My focus has been on taking advantage of recent investments in paperboard and sawmill operations. By selling our newsprint mill in Spain in 2016 and making our paper division smaller, we made the rest of our businesses stronger in packaging, wood products, and even hydro and wind power. We made our forest the core of our business. Everything we do today is based on what grows there: it’s our most precious and protected resource.”
It’s also part of the secret of Apple’s boxes, Henrik reveals. Iggesund specialises in multi-layer cartons made from chemical pulp, designed to bend without cracking. “Apple’s partnership has been demanding, and it has put pressure on us to develop our products to the highest standard, which includes special designs just for them. We set very high quality standards for ourselves.”
According to Henrik, Tim Cook is just a normal guy. “Of course, he’s not ordinary in terms of the company he’s leading. But once you talk to him, he’s a lot more interested in what we do than you might think. Tim chose to go public with our partnership last year, using our sustainability image to promote Apple’s products,” explains Henrik.
“That changed our world, because now Holmen is associated with one of the biggest brands of our time. Tim was very interested in the fine detail, so we went through every step between planting the tree to having the board come out of the machine with him. It was great to see his interest because it showed that sustainability is about much more than how you treat the environment; it’s also about how you treat your employees.”
“Sustainability is about much more than how you treat the environment; it’s also about how you treat your employees.”
Forest comes first
More than half of Sweden’s total land area – 57%, or 23 million hectares – is covered in forest. In less than a century, the country’s forest assets have doubled as forestry became ingrained in the national economy. “With a net export value of more than SEK130 billion [!about!], our forests are internationally certified by the Forest Stewardship Council and the Program for the Endorsement of Forest Certification. This means we have to treat the land in a certain way – using it for resources while also helping it to grow. In line with these regulations, we have set aside a large portion of the forest for preservation,” says Henrik.
With more than one million hectares of productive forest land, Holmen is one of Sweden’s largest forest owners. The annual volume harvested in its company forests is some three million cubic metres, and Henrik explains that every action stems from a sustainable business model. With a history stretching back 400 years, Holmen has a long tradition of managing and processing natural resources. “For the past 400 years we have taken exceptional care of everything that comes out of the forest. We manage the forest to achieve a balance between growth and biodiversity, and we have low emissions and transport costs because our mills are so close by.”
As with any industry, Holmen has its critics. “There are some who say we shouldn’t touch the forest, we should leave it alone. It’s a very common sentiment in countries outside Sweden. However, because forestry is such a big part of our economy, we need to be sustainably managing the forest to maximise growth and combat the bigger issue of global warming,” Henrik explains. “If the forests aren’t growing, then they aren’t binding CO2. If we leave the forest alone for a while, it will capture even more CO2, but if we leave it for too long then some trees will die and emit CO2 as a result: it’s a zero-sum game. It makes more sense for us to manage the forest, harvest it, and produce eco-friendly building and packaging alternatives. We can do a lot of good with what we have.”
“It makes more sense for us to manage the forest, harvest it, and produce eco-friendly building and packaging alternatives. We can do a lot of good with what we have.”
World leader in sustainability
Over the past decade, Holmen has continued to appear on the indexes of the world’s most sustainable companies, recognised by the UN’s Global Compact and the Corporate Knights. “At Iggesund, we feed in raw materials to produce bioenergy, paper pulp and paperboard,” explains Henrik. Not the first time it’s been recognised for sustainability, in December last year Iggesund Paperboard’s mills in Sweden and the UK received the highest sustainability rating from analysts at EcoVadis.
With its own energy production and resource-efficient production units, Holmen contributes to long-term value growth and reduces the amount of carbon dioxide in the atmosphere by more than two million tonnes each year. It has also been acknowledged as a leader in the work against climate change by the Carbon Disclosure Project. “Everything starts with long-term, sustainable forestry,” says Henrik. “We’ve brought a collection of industries together in one place, next to the forest, and we’ve built something that’s truly sustainable and CO2 positive. This creates countless possibilities for innovation and climate compensation in the long-term.”
“We’ve brought a collection of industries together in one place, next to the forest, and we’ve built something that’s truly sustainable and CO2 positive.”
Holmen is also devoted to developing its renewable energy investments, with its yearly hydropower production amounting to some 1,100 gigawatt hours of electric power. The Group is about 60% self-sufficient in wood, and 50% self-sufficient in electricity. “In today’s circular economy, it’s all about recycling whatever we can,” says Henrik. He explains that most of the thermal energy Holmen requires is covered by bioenergy produced at its own facilities, with six production plants in Sweden and one in the UK. He adds that first-class sustainability work is an important prerequisite for making deals with major brand owners, who are often focused on creating a more sustainable society.
Holmen’s five divisions:
- Iggesund Paperboard produces paperboard for consumer packaging
- Holmen Paper manufactures printing paper
- Holmen Timber produces wood products
- Holmen Skog manages the Group’s forests
- Holmen Energi manages the Group’s hydro and wind power assets
A change for the better
“One of the best decisions we made as a company was to sell our mill in Madrid, Spain. By moving away from our reputation as a newsprint production company in an unstable market, we could return to our roots as a forest-holding company in a budding industry. Now, we work with fresh fibres instead of recycled fibres; we have stable profits and strong growth opportunities,” says Henrik.
One of Holmen’s focus areas has been to increase awareness of the environmental benefits of building with wood, as opposed to concrete and steel. “Our trees are grown with up to a 90-year time frame to maximise the length of the fibres, and all timber goes straight into producing housing materials,” says Henrik.
“When we speak to environmental organisations, including Greenpeace, everyone seems to agree on one thing: building with wood makes sense. It’s now a matter of educating architects, manufacturers and construction companies to embrace it as a more valuable and eco-friendly material.”
The fight against plastic
Henrik believes that Holmen stands a strong chance in replacing plastic packaging with sustainable fibre-based materials, but there’s still a way to go before this becomes a reality. A large portion of Holmen’s research and development (R&D) efforts are devoted specifically to recreating barriers. “You can’t take water and put it into paperboard or fibre-based packaging: you need a barrier. While many barriers are typically made from plastic, we are working on a fibre pulp-based alternative that will work not only for dry food, but also frozen food, chilled food and liquids. If all packaging is biodegradable and free of aluminium and plastic, it will change the world dramatically,” he explains.
To further R&D in new barrier material, Israeli development company Melodea – which is 40% owned by Holmen – signed an agreement with Brazilian forestry company Klabin in February this year to continue developing nanocellulose. For almost a decade, Melodea has been developing crystalline nanocellulose, a tiny fibre with huge applications. While this fibrous material is made from wood, it’s much stronger and more impermeable than regular paperboard. Holmen is interested in using this material in its products, including as a barrier, meaning that paperboard could be made waterproof without using plastic film or aluminium foil. With the help of Holmen’s investments, a pilot production facility for nanocellulose will soon be launched near Örnsköldsvik in northern Sweden.
It wasn’t too long ago that most people believed there was an unlimited availability of recycled fibres, says Henrik. That’s no longer the case today. “People now understand that there is a limit to the reusability of recycled fibre,” he says. “The industry of the future will know which fibres to use, and they will value quality and sustainable sourcing, which is why there will be more focus on planting trees to expand existing forests.”
While European countries are already environmentally conscious, Asia is still a heavy polluter with a long way to go in its sustainability journey. “Countries like China make huge investments in importing raw materials from the US and Europe, but a lot of that is of poor quality,” says Henrik. “I’m happy to see that is now starting to change.”
With more than 3,000 employees, Henrik quickly discovered that a good culture is impossible without good leaders. “You have to have the right people, because if you don’t, it’s very difficult to change. You have to be clear about your expectations, and you have to give feedback. At Holmen, we have a strong set of common values that form the backbone of the company. I think it’s very easy to be inspired and motivated when you work in an exciting field like ours,” he says.
While Henrik is all about embracing digitalisation, he insists that nothing beats face-to-face contact. “Email and phone can only get you so far. True leaders talk to people, look in their eyes, notice their body language, and see how they feel. Being there in person makes a big difference.”
“Email and phone can only get you so far. True leaders talk to people, look in their eyes, notice their body language, and see how they feel.”
Forests are the future
To ensure Holmen’s forest is managed sustainably in future, Henrik believes it is essential to engage with politicians in Sweden, Belgium and elsewhere across the EU. “We need them to see the big picture: that global warming is real, and the forest is part of the solution."
"We need to use sustainable materials even more than we do today. When it comes to energy, we have both hydro and wind power in Sweden that can be expanded. The key is finding that balance between manufacturing and taking care of the environment,” he remarks.
Henrik likens this process to fish being allowed upstream to play. “You have to make sure you give them a realistic chance to do that, but you also don’t want them to swim straight into the turbine.”
While Holmen has no plans to expand its paper business, the Group is eager to focus on a more niche market in book and magazine paper using raw materials. “Fresh fibres provide us with a wealth of opportunities and advantages.
We will continue to do what we do now, but better. When it comes to paperboard, we’re seeing a lot of new capacity particularly in the premium segment in Asia and Europe.”
“There is a noticeable trend towards producing fibre-based packaging solutions to replace plastic, as it’s known to be detrimental to the environment. While it’s a fantastic material in terms of flexibility and cost, we are going to have to live with the consequences of plastic use for the next 1,000 years. Biodegradable packaging is one of the biggest and most impactful changes we can make,” observes Henrik.
“We’re in a business that has a great future, and it’s all about positioning ourselves in the best possible way to take advantage of those opportunities. That means having a good team, or many good teams in our case, and it all starts with leadership.”