The merger may make the Escanaba plant one of the leading facilities in the country in terms of advanced paperboard technologies. It means more jobs and job opportunities for local residents (Likely money/tax revenue for the community.). Prior to the merger, there was some concern that if Verso ever closed the town's economy would nose dive. One of the reasons why I'm doing my best to look at new economic models and theories (...not that it will or won't have an impact but simply to understand) as a way to return investment and generate new opportunities based on existing local strengths (A model that can be applied elseware.). Attracting and retaining the right kind of industries will create a more resilient local economy.
Products
BillerudKorsnas AB also won an award by Tetra Pak for fighting global warming through decarbonization, low green house gas emissions, a 97% fossil free production site. Notice in 2025 they plan on having a 100% fossil free location and how that coincides with conversion of one machine (That doesn't mean its the Esky Mill but it would be interesting if it turns out to be. See Delta County Green/Smart City)
BillerudKorsnas AB makes cardboard packaging and in a world where products are being bought and shipped from online marketspaces there is a high likelihood the company is tapping into a upward swing in online purchasing trends that rely on packaging solutions. You can review some of their products HERE and their general served industries of food, consumer & luxury, medical & hygiene HERE.
Investments
The increase in $1 billion investment into the Escanaba mill will likely secure employment and other benefits for local residents, and new comers, into the mid term future (Its possible to project that under the investment schedule and company adjustment to figure minimum years of benefit. Maximum years are based in market projections beyond the next 20 years ish and are difficult to determine as manufacturing centers shift.). What we might want to see is investments in complementary industries that can build off of core competencies and shared interest in resources, human capital, and knowledge to create sustained global advantages.
Fighting Climate Change
Historical Context
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Escanaba MI./Delta County, Mi. Now known as the |
Strategy
The company will still keep Europe as its primary market but is actively seeking to move into North American and locate operations where there is an abundance of fiber supply (I wonder if they are also thinking Canada). The company seeks to have net sales growth of 3-4% per year and the EBITDA margin above 17% (I dislike EBITDA...grrrrr Its so finite without a full capture of the activities.😤). You can check out the company on Reuters and look at the advanced chart to see its growth status over 10 years.
You will also notice that BillerudKorsnas is also working with BASF to try and create higher levels of products with more end of life options. That could mean some state of art advancements are coming in the packaging process. BillerudKorsnäs paper ConFlex® Silk as well as BASF’s biopolymer ecovio® and lamination adhesive Epotal® Eco. Read BIL-BASF Press Release.
Noteworthy Articles:
-$27 per share offer by BillerudKorsnas AB and a prior offer by Atlas Holdings for $20.
-Unsolicited offer (Meaning the terms were very positive and little reason to reject it. That also may be an indication that Verso may have already been thinking of long term ownership options without yet searching and without yet.)
-The purchase is in line with their paperboard strategy and goals to have a bigger presence in North America.
-Together BillerudKorsnäs and Verso will be the largest producer of virgin fiber paper.
-One machine is estimated to be converted by 2025, a second machine by 2029, with a total capacity of around 1,200,000 tons (Looks like there may be new tech coming along with it.)
-BillerudKorsnäs is committed to continuing to serve Verso's existing customers.
-increased debt and operating cash flow to pay for purchase.
-Sales ending September 30 2021 of USD 1 264 million and adjusted EBITDA of USD 158 million (I dislike EBITDA and over reliance on it but yes...its an important metric of performance. grrrrr again!!!🙈).
-Financed through 3.5 Billion Krona, debt and operating cash flow (The company has the resources to make a large purchase and may be considering others.).
-Verso reported its net sales grew by 11% to $339m compared with the same period of last year (FY20)
A couple of Key Points:
-Unsolicited offer (Meaning the terms were very positive and little reason to reject it. That also may be an indication that Verso may have already been thinking of long term ownership options without yet searching and without yet.)
-The purchase is in line with their paperboard strategy and goals to have a bigger presence in North America.
-Together BillerudKorsnäs and Verso will be the largest producer of virgin fiber paper.
-One machine is estimated to be converted by 2025, a second machine by 2029, with a total capacity of around 1,200,000 tons (Looks like there may be new tech coming along with it.)
-BillerudKorsnäs is committed to continuing to serve Verso's existing customers.
-increased debt and operating cash flow to pay for purchase.
-Sales ending September 30 2021 of USD 1 264 million and adjusted EBITDA of USD 158 million (I dislike EBITDA and over reliance on it but yes...its an important metric of performance. grrrrr again!!!🙈).
-Financed through 3.5 Billion Krona, debt and operating cash flow (The company has the resources to make a large purchase and may be considering others.).
-Verso reported its net sales grew by 11% to $339m compared with the same period of last year (FY20)
-Northern Wisconsin has passed legislation to keep some of its mills functioning until they find a buyer. (Might be an opportunity for a consortium of investors that want to work on planting more seeds to increase fiber growth that slows climate change and creates a sustainable industry in the region.)
Cluster Notes Conception: Having an understanding of the different investments in the area, state, region, and globe help to determine trends that help companies align their operations (See MI Expansion or Protectionism). Specifically, in the DC model I'm creating it is possible to connect companies to enhance shared resources, infrastructure (Shipping Infrastructure, DC Broad Band $18 Mil, Global Supply Chain, DC Venture Invest), institutions (Rights and Clusters, Law & Economy) and activities to achieve mutual growth while encouraging faster innovation.
Coordination Opportunities W/College
Bay College (local community college) may want to partner with BilleerudKorsnas to see what skills the company (and region) needs from local graduates (See Skill Availability and Investment). There appears to be programs in Forestry and Fire Science didn't see one directly related to the paper industry (You may need to look around and see if any of their programs are of interest. Review the offerings HERE.) Paper Science and Engineering degrees are excellent. (See Best Paper Science Colleges 2022). Its also possible to create truncated production associate degrees and/or certificates on the based on paper making production, familiarity with equipment, and general plant safety (Its just an idea on how industry and colleges can partner to make education increasingly relevant. Who knows....maybe mills will pay for an associate degree as an augmentation to internal training. or maybe it attracts companies to send employees through an online version. 🤷)
[As a side note: Its important for higher education institutions to hire qualified faculty from a diverse range of backgrounds to better prepare students to compete in a world where knowledge is fluid and culture is more relative. Things sometimes only seem local but they are still influenced by global pressures and trends. See cultural hiring. If our colleges want to compete globally they have to think globally.
Aligning education to industry needs while still maintaining the general purpose of broadening minds and developing the whole person often leads to improved lives and new employment opportunities. Its how you interweave information to stay focused on employer needs while infusing broadening ideas within that content. i.e. multiple sort of themes in the narrow and wider context. One might include for example common industry job skills, wider industry-economic awareness, life-long personal development skills and societal knowledge all in the same program. There are likely many different opinions on how to do this. See Global Mindset]
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Other Activities in the Area
We should also consider that there has been other movements in the area such as Navy ship works and general focus on enhancing the marina and tourism that will create their own benefits . Housing is also becoming an important consideration in Escanaba and that can be used for new residents, tourism, elderly, and young people who want to live downtown (i.e revitalizing the downtown and making it attractive to young people.). Furthermore, Concentric's purchase of EMP for the the auto (maybe pumps for future space) industry is another solid investment that contributes to potential future growth. Concentric-EMP EV Auto, Michigan EV Upswing and a nice article by by Auto Litigation Partner/Attorney Lauren Loew in the National Law Review (Time will tell what happens. You may want to read a little about Marketing Brand Management, Delta County Marketing)
Cluster Notes Conception: Having an understanding of the different investments in the area, state, region, and globe help to determine trends that help companies align their operations (See MI Expansion or Protectionism). Specifically, in the DC model I'm creating it is possible to connect companies to enhance shared resources, infrastructure (Shipping Infrastructure, DC Broad Band $18 Mil, Global Supply Chain, DC Venture Invest), institutions (Rights and Clusters, Law & Economy) and activities to achieve mutual growth while encouraging faster innovation.
For example, if we review the different technological lines developing within the cluster, compare that to growing international market needs, we can in turn place greater emphasis in areas that are likely to bear fruit for multiple industries (sometimes getting them to work together on shared projects. See R&D, Business Collaboration, ). Its not specifically related to this or any other company but as a general approach of how one would map and create opportunities (Interorganizational Collaboration, Cluster Collaboration, Sub Cluster Factors, Economic Synergy and Multi Clusters.)
Once we map an area by its transactions we are better able to know where to help shared elements grow through focusing efforts in key areas that improve the speed of transactions (Hub Flagship and Working Hub) Where there are deficits of need a new start up or recruiting a new company might be beneficial. (Availability of Financial Information, Virtual Communities, Attract SME, Pure Michigan, Tourism and Natural Resources, Esky Downtown, DC Hedge Fund, Regional Development, Institutional Invest, etc...) I guess such concept would come under a "cluster management" approach.
Again, I'm only working on a model so its just a hypothetical example for the moment. Within such a system there would need to be wider applicability so as to create a more sustainable economy with growth prospects. Perpetual Sustainable. Roaring 20's, Infrastructure Synergy, Innovative Macro Systems, Developing Hub Networks, Reinvest Marketing Systems, Super Hubs, and Renaissance Info Age) Maybe at some point I can break it into a complex mathematical formula but I'm not anywhere near there; maybe not. I need to first understand the factors and whether innovative systems can be throttled up or down for greater economic influence. 🤷(See Empiricism and New Economic Theory, Theory Application, Mathematical Projection, Innovation, US. Losing #1 New Theories Needed and Theory of Transactional Innovative Clusters).
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