Ahlstrom-Munksjö Explores Strategic Opportunities for Its Decor Paper Business

The Decor business produces paper in a wide range of colors, grades and grammages for decorative applications, mainly used in laminated furniture, flooring and interior applications both for technical and esthetical purposes.

Sept. 17, 2019 - Ahlstrom-Munksjö is currently exploring potential acquisitions, mergers and joint-ventures with decor paper suppliers in China to speed up the execution of its strategy and capture the attractive value-creation opportunity in the decor business. In addition, the company is investigating the possibility to attract outside capital investment into the Decor business to further fund such objectives.

“With the aim to strengthen our platform of businesses, Ahlstrom-Munksjö regularly assesses what is the best structure of its businesses,” said Hans Sohlström, President and CEO of Ahlstrom-Munksjö. “The opportunities currently being explored are based on strong strategic and financial rationales. Partnering with a leading Chinese supplier would create a global leader with strong presence in the world's two largest markets. Together our capabilities would be highly complementary and significantly strengthen our market coverage and customer offering. It would allow us to offer an industry leading brand with premium quality and service, while at the same leverage from the state-of-the-art production capabilities on a global scale.

“Our intention is to attract outside capital to the Decor business to accelerate the development of the business into a stand-alone global operation. This will also allow further investments to enhance its operating performance and enable expansion via M&A in China,” Sohlström said.

Ahlstrom-Munksjö's Decor Paper Business

The Decor business area is one of Ahlstrom-Munksjö's five reporting segments, with net sales of EUR 451.9 million and comparable EBITDA of EUR 37.1 million in 2018. The Decor business produces paper in a wide range of colors, grades and grammages for decorative applications, mainly used in laminated furniture, flooring and interior applications both for technical and esthetical purposes. Production takes place at three dedicated plants; Unterkochen and Dettingen in Germany and Tolosa in Spain, and at two shared sites, Caieiras in Brazil and Arches in France.

Ahlstrom-Munksjö's Decor business currently has strong market positions in Europe and the Americas, ranking as the second largest in Europe and the fourth largest in the world. It is the leading brand globally competing with quality and service. Furthermore, it is the only supplier with a dedicated R&D organization, working in close cooperation with the R&D teams of our key customers and main suppliers to innovate and enhance added value. It has a diverse product offering and is the global leader in high-end decor paper segments such as solid colors and pre-impregnated papers.

Ahlstrom-Munksjö's ambition is to develop a leading and profitable position in China, which currently represents the largest and fastest growing decor paper market in the world. The annual demand for decor products is over 900,000 tons in China and close to 600,000 tons in Europe. The market trend growth is estimated at 4-5% p.a. in China and 2-3% p.a. in Europe. The demand is supported by population growth, strong urbanization as well as a growing middle class. Design trends and large investments in efficient wood-panel production globally are also contributing to the decor paper demand growth.

Ahlstrom-Munksjö is a global leader in fiber-based materials. Products include: filter materials, release liners, food and beverage processing materials, decor papers, abrasive and tape backings, electrotechnical paper, glass fiber materials, medical fiber materials and solutions for diagnostics as well as a range of specialty papers for industrial and consumer end-uses. To learn more, please visit: www.ahlstrom-munksjo.com.