Metso's operating environment
We have a balanced offering of products, projects and services business. Our three business segments – Mining and Construction Technology, Energy and Environmental Technology, and Paper and Fiber Technology – offer products and services to a range of customer industries in varying phases of development, which balances our growth and fluctuations in our profitability.
Our customers operate in several industries
We serve customers around the world in the mining, construction, power generation, oil and gas, recycling, and pulp and paper industries.
Most of our customers are industrial companies, like mining companies, energy companies, and paper companies. Contractor customers are mainly in the construction and recycling industries. A large share of our customers operate in the process industry and use natural raw materials or recycled materials in their production.
Large-scale project deliveries are typical to the mining, power generation, and pulp and paper industries. Correspondingly, our deliveries to the construction and the oil and gas industry consist primarily of individual equipment components and smaller package solutions. The share of services is significant in all our customer industries.
Market outlook affects investment decisions
Our customers make investment decisions mainly based on long-term price development and market outlook for their products. Our customers typically finance the smaller purchases of services and machine rebuilds with their own cash flows, and bigger project sales are financed with a combination of their own cash flows and debt financing. As a principal rule, we do not finance customer projects.
Our customers are emphasizing the return on investment in their decision making, thereby aiming to reduce continuously the investment and operating costs of their production lines. Energy accounts for a substantial share of production costs in the mining, recycling, and pulp and paper industries, so investments that improve energy efficiency are becoming increasingly important. Additionally, increasingly stricter energy and environmental legislation brings its own challenges to our customers’ operating conditions. Alternatives with less environmental impact are being pursued to replace fossil fuels. By using recycled raw materials and boosting the efficient use of raw materials, the aim is to reduce the use of natural resources. The challenges our customers face are opportunities for us because we can offer them both cost-efficient and environmentally-efficient solutions.
In emerging markets, there is a growing customer base of local players who want products that are adapted for local markets and often more cost-efficient than the products we have traditionally offered in developed markets. For us, this means learning new business logic and adjusting operations to these new customer needs.
Last updated Jul 29, 2010
