Objectives and strategy
Profitable solutions for all customer needs
Raute's strategy boils down to the revamped vision: Raute wants to offer profitable solutions for all customer needs.
Profitability is an essential condition for both Raute and its customer to be able to continue and develop their operations. The solutions integrate technology, equipment and the services necessary for their operation and development. As market focus is increasingly shifting towards the emerging markets, Raute must identify individual customer needs better than before and be able to offer, in addition to solutions based on state-of-the-art technology, solutions for conditions where automation is not yet the decisive factor creating a competitive edge.
Raute's strategic choices are based on two trend-like changes that will continue to shape the markets in the coming years.
- The focus of the entire market continues to shift towards emerging markets. The share of veneer-based products originating from China and the rest of Asia, Russia and South America in relation to global production will increase.
- The plywood and LVL industries' investments in the traditional western markets, with their high cost and price levels, will increasingly focus on projects to raise the efficiency of existing production capacity and improve competitiveness, while little new capacity is being constructed.
Raute's main strategic goals are
- improving profitability
- adjusting better to economic cycle variations and
- controlled growth.
Raute's financial goals are to improve profitability and maintain good profitability in all economic cycles, to grow faster than the markets while maintaining good financial solidity and to offer investors competitive returns. As the actual development is affected by the cyclic nature of global economy and investment demand of customer industries, no target values are disclosed for the financial key figures.
Strategic action areas
Raute has chosen the following strategic action areas:
- customer focus
- global service
- emerging markets
- cost efficiency and
- hunger for success.
These strategic action areas put Raute in a good position to serve its customers profitably.
The customers needs are the most important driver of Raute's operations. A better understanding of the needs of different customers and production bottlenecks must be gained. This understanding must be translated into solutions that truly help customers face their own competitors. Raute must become the preferred supplier in the eyes of a growing number of customers and in various market areas. This can only be achieved if the product offering genuinely meets the customers' needs and helps them develop their own operations.
Technology services will play a more significant role as a result of both changes in the market and development of technology. The new, constantly developing technology demands know-how, which, for many customers, is not worthwhile investing in themselves. Technology development also makes it possible to extend the life cycle of basic equipment through modernizations. Raute's goal is to be the trusted partner of its customers throughout the life cycle of the investment. In many market areas, Raute has not yet reached such a strong position that the installed base as such would be sufficient to ensure profitable aftermarket business activities locally. In future, Raute will also focus on modernizing competitors' equipment with Raute's technology.
Emerging markets will have more weight in business operations. However, they do not form a coherent whole. In China and India, most of the plywood production remains highly manual and old-fashioned. On the other hand, Russian and South American producers, for example, have reached a technology level that is quite near to that of developed markets. The common denominator of the emerging markets from Raute's viewpoint is the cost structure of wood products and their production machinery: labor costs are low but raw material costs are high.
Overall operations must be cost-efficient and price-competitive. Raute focuses on areas of strong internal expertise and improves its service capability by building an efficient and flexible partner network. Successful implementation and management of such a network is an important goal.
Raute wishes to provide an attractive workplace for people driven by a hunger for success. Driven by a hunger for success and committed to the company's goals, Raute's employees create the conditions needed for the company to succeed. Even in difficult years, Raute has invested in the occupational well-being and commitment of its employees. Priorities of competence development are in customer service capabilities, emerging markets and cost-efficiency.