In order to achieve a GDP organic growth, healthy margins and strong cash conversion in the coming years, Ahlstrom has launched a new purpose and strategy by implementing a new operating model and reorganizing key parts of the business, including simplification of its five divisions to three.
May 16, 2024
Over the last two years, Ahlstrom, a global leader in combining fibers into sustainable specialty materials, has launched a new purpose and strategy, implemented a new operating model, and reorganized key parts of the business, including divestment of the Décor business and divestment of the Stenay plant in France. Strengthened capabilities in procurement, pricing, and operational excellence have boosted profitability and margin quality despite challenging market conditions.
As Ahlstrom continues its transformation, the company is well positioned to capture growth by addressing global trends. Among the biggest challenges in the coming years are the transition toward clean air and water, personalized healthcare, sustainable packaging and protection, decarbonized buildings, and electrification. Sustainable materials will be needed to address each of these trends.
To capitalize on these market opportunities, Ahlstrom has defined five strategic pillars: Growth Acceleration, Safe & Sustainable Innovation Leadership, Operational Strength, Cash Discipline, and Engaged Employees. Together, these strategic pillars will enable each of Ahlstrom’s business units to advance their ability to lead in existing markets or to enter new markets in response to one or more global trends, says a statement issued by the company.
With a clear strategic focus and intentional resource allocation, Ahlstrom aims to generate above GDP organic growth, healthy margins, and strong cash conversion in the coming years, while being recognized on the market as the preferred sustainable specialty materials company and continuing to operate in line with its purpose to purify and protect with every fiber for a sustainable world.
To support the strategy, Ahlstrom is simplifying its divisions from five to three: Filtration and Life Sciences, Food and Consumer Packaging, and Protective Materials. This means that the former Filtration and Healthcare divisions merge to form the Filtration and Life Sciences division, Food and Consumer Packaging remains the same, and the former Building Materials and Technical Materials divisions form the new Protective Materials division.
The new divisional structure ensures that Ahlstrom’s technology can be better deployed to address global trends with safe and sustainable specialty solutions. In addition, product management will be elevated in the business units and across the divisions to further accelerate the transition towards a more specialty portfolio, and to support the journey to safe & sustainable innovation leadership.
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The business units and plants remain the heart of Ahlstrom’s business and operations and their structure will not change. The streamlined structure will drive simplicity, take out cost and will allow the business units to further focus on driving growth.
“We are taking further steps to become a sustainable specialty materials company with our refined strategy and simplified organization that is best equipped to support our customers and the world to address global trends. Our products touch the lives of people on a daily basis, from more sustainable and safe solutions for food and beverage packaging, to filtration materials for cleaner air and water, to materials that support better healthcare and life science diagnostics. Our sustainable specialty solutions add value for customers and consumers globally while contributing to a better world. With our strong focus on innovations that are safe and sustainable by design, I’m filled with confidence in Ahlstrom’s future,” says Helen Mets, President and CEO of Ahlstrom.
The ambitions of the new divisions are:
Filtration and Life Sciences: Ahlstrom’s “purifying” powerhouse with mission critical air and liquid filtration applications and life science and medical solutions. The division aims to expand in industrial filtration and bioprocessing, leveraging clean air and water and personalized healthcare trends. Daniele Borlatto, previously EVP, Filtration division is appointed as EVP, Filtration & Life Sciences division.
Food and Consumer Packaging: Solutions for improved food safety, product preservation, and bacteria prevention, helping extend product life and protect human health. The division has the ambition to lead the transition from single-use plastic to more sustainable packaging, leveraging new barrier solutions and high-performance materials that are safe and sustainable by design. The search for a new division head is ongoing.
Protective Materials: Highly engineered materials for every surface of the building, and specialty materials for electrotechnical and other industrial applications. The division has the ambition to offer sustainable solutions for the decarbonization of buildings and industrial electrification and grow in niche, high-performance industrial applications. Sophie Haan, previously EVP, Technical Materials division is appointed as EVP, Protective Materials division.
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Mark Ushpol, EVP for Food & Consumer Packaging division, Emmanuelle Picard, EVP for Building Materials division, and Jacques Lafon, EVP for Healthcare division will leave to pursue careers outside Ahlstrom.
“Daniele has long experience and a great track record in leading Ahlstrom’s Filtration business, and he is recognized as an industry thought leader in the filtration space. Sophie has successfully led the Technical Materials division and she has a background in leading businesses in the process and specialty industries. Daniele and Sophie will continue to accelerate sustainable growth and drive greater customer-centricity to strengthen Ahlstrom’s position as a global leader in sustainable fiber-based specialty materials. I would like to thank Mark, Emmanuelle and Jacques for their drive and dedication to Ahlstrom’s business, and I wish them all the best of success in the future,” says Helen Mets.
The changes in organization are effective from May 1, 2024. Financial reporting according to the new divisional structure starts from July 1, 2024, and the financial results for Q3 2024 in line with this new structure will be published in early November.
