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Forest Industry Insights: A Q&A with Tuomo Kuokkanen

Tuomo Kuokkanen from Accenture Finland discusses the ongoing evolution of the forest industry.
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Describe the changing demand dynamics in the forest industry.
The demand dynamics in the forest industry are certainly interesting. On one hand, the rapid growth of digital media has led to reduced demand for many paper grades in developed countries. However, this decline has been offset by demand in emerging markets, keeping worldwide demand somewhat stable.

Looking at demand by major products, there is a decline for printing and writing paper, while we see some growth for packaging paper and cardboard. Meanwhile, softwood and hardwood pulp have seen slight demand increases and positive price trends over the past few years.

Bio-based products and materials, including pulp, are considered areas that will see future growth. As a result, there have been recent investments in new pulp production capacity in several geographies, which is a positive development for the industry.

What are the top issues on the minds of forest industry executives?
Most executives are thinking about how to reinvent their companies for growth. As such, we are seeing the emergence of new types of businesses, especially bio-products as noted above. These products allow bio-materials to replace fossil fuel-based materials in the manufacturing of many types of industrial and consumer goods.

Top of mind for industry executives is also the concern about profitability and costs due to challenging and volatile market conditions. Thus, there is a real opportunity for companies that can achieve operational excellence because it will help them protect market share and stay on top of costs and profitability while facing commodity price pressures.

Lastly, corporate responsibility and sustainability have been and will remain key themes in the industry. Evidence of this can be seen in the current actions taking place around responsible forestry and in the growth of bio-product businesses, as previously mentioned.

How can companies in the forest industry benefit by embracing digital?
There are several ways that the industry can benefit from digital transformation. First, it can utilize digital channels to connect with customers and partners, which can help boost revenue, bring better customer insight, and support improved collaboration. The industry has been fairly successful with these channels, but there is always room to do more.

Second, companies can digitalize operations in order to accelerate, automate and simplify processes, and ultimately reduce operating expenses. Here again, the industry has embraced digital in operations to a great extent. As an asset-intensive industry, it has emphasized automation for a long time already, but the bar is being constantly raised.

Third, companies can focus on digital as an enabler of new products, services, information and platforms, as well as new business models. This third area is still relatively new for the industry and represents a significant untapped opportunity.

Talk about your interest in the forest industry and consulting.
I was born and raised in Finland, which has historically been a center for the paper industry. So you might say my passion for the industry began at birth!

I personally find asset-intensive industries quite fascinating—from the set-up of operations to changing market dynamics to the long-term view that companies must maintain due to their large asset base. As such, I have really found my home at Accenture because we value bringing deep industry knowledge to our clients, of course coupled with our unique end-to-end capabilities.

I also love to travel internationally, and my consulting career has given me that opportunity. I’ve worked in both Europe and Asia on a long-term basis. Although I am a big fan of technology that allows people to virtually connect regardless of their physical location, I also feel very fortunate to have seen the world first-hand. Nothing can replace the powerful experience of going to a new country that has a different culture and customs. It really is life-changing.

What is one of your favorite passions outside of work?
Spending time in nature is definitely my thing. For example, I just spent a weekend camping with my two children in the lake district of Finland. In fact, there was a group of us that included a total of five fathers and seven children of various ages, which made playing hide-and-seek lots of fun. With a little early autumn rain during the day, a warm campfire and clear sky at night, and a good night’s sleep in a tent—for me, it was a great weekend!