Metso Power becomes Valmet, scores Croatia deal
Metso’s pulp, paper and power line is demerging from the company and in 2014 will once again be known as Valmet Corp., a name the business segment was known as prior to 2001.
Last month, Metso Corp.’s extraordinary general meeting approved the demerger plan, pursuant to which all the assets, debts and liabilities relating to Metso’s pulp, paper and power businesses will transfer without liquidation to Valmet Corp.
Metso’s mining and construction segment and automation segment will form Metso’s continuing operations.
According to a Nov. 12 stock exchange release, the demerger is expected to be registered in the Finnish Trade Register on or about Dec. 31, after which Valmet shares will be admitted for public trading on NASDAQ OMX Helsinki.
Beginning in the 1920s, Valmet focused on serving industrial plants to meet the needs of the Finnish Armed Forces, and during the 1950s began to broaden its product range to include ships, aircraft, weapons, locomotives, tractors, marine engines, elevators and paper machines. Valmet delivered its first paper machine in 1953, becoming a well-known brand in the pulp and paper industry. Over the years, different segments of the company’s product line was sold off, and the company eventually bought Wärtsilä's paper finishing machinery unit. Metso Corp. was the result of a merger between Valmet and Rauma in 1999, and its fiber and paper technology business area was known as Valmet until the name was changed to Metso Paper in 2001.
The purpose of the demerger is to offer the best preconditions for Valmet and Metso to efficiently utilize their respective strengths in their respective customer industries, according to a demerger prospectus released by Metso. The prospectus states that both companies would be globally leading companies in their respective markets and management believes that the next steps in their strategic development would be taken most efficiently as two separate companies, enabling more focused strategies and operations.
Metso is currently referring the demerged corporation as the future Valmet, which recently announced it will supply a complete biomass-fired cogeneration plant to provide heat and power to the city of Babina Creda, Croatia.
The turnkey delivery will include a boiler island, a turbine and buildings as well as installation and construction works. The plant will have a power output of 9.7 MW and a heat output of 10 MW. Power will be distributed to the local grid and the heat will be utilized in a wood pellet factory, other industrial facilities and nearby greenhouses.
Jorma Lehtoviita, vice president of Metso’s heat and power line, said the project marks the company’s first renewable power delivery to Croatia. “This makes the project an important milestone for us,” he said. “The use of renewable energy sources helps to ensure a reliable energy supply, and creates new business and job opportunities in biomass logistics. This project will strengthen our local presence and we plan to use local partners and services during the execution of the project.”
The plant is scheduled to be in operation in 2015.