Metso Outotec – Everything Old is New Again
Metso Outotec was founded last summer. Metso Outotec has 150 years of history behind it. We find out how this old, new company is driving innovation.
A few months ago Metso Outotec didn’t exist. However, competing mining and aggregate industry suppliers, Metso and Outotec, did exist, each with 150 years of history in the industry. While the companies were competing, however, they realised there was also a great deal of opportunity to be had in the synergies and complementary products each company could offer.
By combining forces, Metso Outotec has today the widest offering from ore body to metal, with global number 1 position in aggregates, minerals processing and metals. The company employs 15,000 people and operates in more than 50 countries being among the largest geographic footprint in the industry.
“It was a nice marriage,” says Sami Takaluoma, President of the Consumables business area of Metso Outotec. “We were competitors, but we had more complementary products and offerings in our portfolio, and now we’re in the industry with the full offering for our customers. That is one of our strengths moving forward.”
Five months into the new company there has already been a lot of integration in the process of putting the two companies together.
“We’re establishing the new culture of a new company, and this has been relatively smooth and easy,” Takaluoma says. “I think the main reason for that has been that although there are different cultures inside the companies coming together, we’re both originated from Finland, so there are certain underlying base values that have been the same.”
One of those key underlying values is a respect for the importance of innovation.
“Innovation and technology are a big part of our company. We invest 100 million euros in research and development projects annually, being one of the highest spends in the industry,” Takaluoma says. “It’s one of the cornerstones of the company.”
Philosophy in Practice
Those values can be seen in practice in the form of the new factory Metso Outotec has opened in Lithuania this year. The factory utilises fossil-free and renewable electricity in its products and its processes have been optimised for each customer segment. The new factory is producing rubber and poly-met wear parts for the mining industry, Metso Outotec’s largest customer segment.
“I’m proud to say globally we are number one in the consumables area. One of the reasons why we have been able to maintain this position is we have chosen and are continuing to follow a strategy where we offer end-to-end service,” Takaluoma explains. “We are manufacturing the products ourselves in our own operations. We are in control of raw material purchasing, making sure the quality starts there. We are responsible for the design, adapting it to our factories. We’re making sure the production process is top-notch, Tier one, and we even collect back the worn products because sustainability is a main driver for the business.”
When scouting locations for this facility, Lithuania seemed like a natural destination in line with Metso Outotec’s strategy to develop its global supply base. The company has currently eleven factories manufacturing synthetic solutions and six metal foundries, and as part of a constantly dynamic business sector, it is continually reviewing customer needs and developing Metso Outotec’s own supply footprint.
“Last year we decided Lithuania is, geographically, perfectly located,” Takaluoma says. “Russia is a big market for us, as is the rest of Europe. So it’s effectively located.”
Aside from the geographical location, Lithuania itself has a number of appealing qualities, as Takaluoma points out, “Lithuania is a rapidly developing country in many ways including infrastructure, IT capabilities, and they still have very skilled employees for this kind of factory work, which is somewhat labour intensive.”
In initiating this project, Metso Outotec naturally worked hard to address every foreseeable risk in advance.
“Nobody knew that we would be ramping up the factory during an ongoing global pandemic!” Takaluoma admits. “That was the sort of moment where you sit down and think what is the best thing to do now? To continue the project? Should we postpone? And we decided to find a way to continue the project plan.”
From the start, Takaluoma knew that completing this project during a pandemic wouldn’t go exactly as planned. Originally the construction of the factory was to be overseen on-site by industry experts who could supervise the construction process and train new staff in the running of the factory. With international travel no longer on the table, Metso Outotec was forced to get creative.
“Like many companies, the digital leap became essential,” Takaluoma says. “We learned how to build up a factory and install equipment remotely. There is a lot of technology available nowadays to do that, but not so much that we’d been using. We had pro-cams in the helmets of people in Lithuania, with experts sitting at home locations, watching, talking and advising remotely.”
The Way Forward
Takaluoma tells us he’s proud of how surprisingly smoothly the development of the factory went once everything was in place, but he’s also clear that this is only the first step in a long-term strategy for the new company.
“When we established the new company in the summertime, we were creating the strategy for that new company,” he explains. “One area we expect to really thrive is sustainability. Sustainability is a big word with a lot of meanings, including everything from safety to carbon footprints. We’re committed as a company to the 1.5-degree climate programme. We will do our share. But what inspires me personally in this strategy is we’re not only doing our part.”
Metso Outotec is sourcing its electricity from green providers and is working to achieve zero emissions at the earliest opportunity. It’s also investing in its operations to reduce the company’s CO2 footprint heavily over the next ten years. However, to really make an impact, Metso Outotec has set its sights on a more ambitious project.
“Our customers have larger CO2 footprints than we do, so we’re using our research and development resources to help our customers reduce their CO2 footprint,” Takaluoma says. That’s one of the great things we’ll be able to deliver for the whole industry and the whole globe.”
Another area where Metso Outotec is looking to lead the industry is in digitalisation.
“The minerals industry may not be today a forerunner in this sector, but that means we don’t need to design everything from scratch,” Takaluoma tells us. “We can learn from other industries and adopt and adapt solutions, adding value for our customers. I’m passionate about working together with customers to make them successful and make the world better.”