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More recently the company has undergone a total reorganization under the direction of Erik Mollatt, the company's president and CEO. According to Mollatt, this core rationalization reflects consolidation in the industry, margin pressure and the need for further price competitiveness. "We are going through a comprehensive but crucial process right now," he explains. "We reduced the number of employees from 2,491 to 2,034, and streamlined procurement. We sold non-core business, and invested 157.29 million dollars in new plants and equipment. This will increase output and efficiency. We are concentrating on packaging - our core business now," he adds. The company has been organized into four business units - all involved in packaging. Peterson Packaging produces 120,000 tons of corrugated cardboard and solidboard, as well as fish-block packaging (in which it has a 50 percent market share worldwide). This unit alone accounts for 40 percent of the company's total revenue. Peterson Linerboard is its second largest unit by revenue. It produces 270,000 tons of 'Kraftliner' paper, among other products. Accounting for 11 percent of revenue, Peterson Barriere produces 45,000 tons of polyethylene-coated paper, which is used for liquid packaging products such as milk cartons. Peterson Scanproof, the final unit in the company's make-up, is undergoing a change of ownership. Peterson is merging it with NorskeSkog Industrier's high-density unit - Union Geithus. The new company will be 55 percent held by Peterson and 45 percent by Norske Skog, and will be open to further outside investment. Divestiture of this highly-specialized unit will create a product-focused business. It is a world leader in high-density paper, which is used in industrial baking, packaging and consumer applications. Its greaseproof paper is also the market leader in Japan. Maintaining Core Values One of Peterson's strongest-held values - and one that has never been neglected in its continuous drive towards efficiency - is its environmental policy. It has the ISO series certificate, and became Norway's first EMAS-registered company (certificate Number 1 in the EU register of environmentally approved enterprises). It also is Norway's biggest user of recycled unbleached fiber. A traditional priority of Peterson, and one that Mollatt is determined to continue, is the company's relationship with its workers. In the 1950's Peterson led corporate Norway in establishing group pension schemes, professional training opportunities, housing and holiday homes for workers. It established a very Japanese style 'suggestion box' system where employees with productivity or quality-enhancing ideas were financially rewarded. Dialogue between management and the employees has always been healthy and positive. "Production Committees", composed of management, workers and officials, have held quarterly meetings for over 50 years. External Outlook The concentration of ownership within Norway has produced clear leaders in certain industries - NorskeSkog in pulp and paper; Borregaard in chemicals; and undoubtedly Peterson in packaging. To further integrate itself in the global market, Peterson announced in September 2000 that it would contemplate talks with strategic investor from the industry to take over the business and position it for the future. "We considered bringing Peterson into the ownership structure of a larger group with greater capital strength," Mollatt explains. "The condition was that whoever took it over would have to incorporate the whole of the group and strengthen it, rather than take it apart piece by piece. However, our terms were not met so we took Peterson off the sale block." This decision was fortunate. Peterson is now a company with a clear direction. Its 449.43 million dollars in sales are sharply up from the average 112.36 million in the early 1980's. It has a strong leadership position in key product areas and large-scale capital investments in its core strengths. Mollatt's vision for Peterson is simple: a strong international presence, healthy profits and continuous growth.
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