Responsibility: Thinking Ahead
Otto Koehler’s acquisition of the Oberkirch “Papiermühle im Loh” paper mill in 1807 laid the foundations for the Koehler Group. Hydropower marked the beginning of our success story more than 215 years ago, and today we get our energy from a whole range of renewable sources. In fact, renewable energy has long been our second pillar. We looked into the future of the Koehler Group with Board of Management members Kai Furler, Dr. Stefan Karrer, and Frank Lendowski.
It’s no secret that the paper industry is extremely energy-intensive. Why is that?
Kai Furler — It’s mainly because of the lengthy drying process for the paper web, which requires a lot of energy to get from a liquid emulsion to the finished paper. As things stand today, we need around 370,000 megawatt hours of electricity and 790,000 megawatt hours of heat at our production sites each year. That’s why a lot of paper manufacturers use their own plants to generate electricity and steam. So old watercolors and drawings of our headquarters in Oberkirch show a lot of smoking chimneys – environmental protection was not such a big issue in the early days. Then in 1987, a state-of-the-art combined heat and power plant was built in Oberkirch under the management of my father and uncle. It runs on coal – with much lower flue gas emissions than before.
Decarbonizing existing power plants is a major component of the Koehler Group’s climate strategy.
The Koehler Group has set itself ambitious targets as part of its climate strategy and views itself as a pioneer in the industry in this regard. Does that mean the energy-intensive paper industry is a transformation role model?
Kai Furler — Every year we use around 62,000 metric tons of coal, based on current figures, which we get from South Africa and Colombia. It is a fossil fuel and has to be transported halfway round the world by ship. Then there are around 150,000 metric tons of CO2 emissions per year from the combustion process on top of that. That is not sustainable, and we recognized this early on. We have actually been using renewable energy in the form of hydropower since the company was founded in 1807. I then decided more than 10 years ago that we would make a major move into renewable energy generation by founding Koehler Renewable Energy. Energy has to be sustainable and must not be based on fossil fuels. A few eyebrows may have been raised back then but it has paid off since: Our renewable energy business segment generated around 120 million euros in 2023.Koehler Renewable Energy is helping us to implement our climate strategy and as such, is a tool for us to drive forward our transformation process. Some think we’re pretty ambitious. We definitely have big goals, but I believe that’s the approach we need to take long term to pass the Koehler Group on to the ninth generation successfully.
By 2030, Koehler will generate all of the energy it needs from renewable sources – at its own plants.
What does that mean exactly? What goals have you set?
Dr. Stefan Karrer — The United Nations has set out sustainable development targets in its 2030 Agenda. All members of the UN – 193 countries worldwide – have committed to implement these targets, known as SDGs (Sustainable Development Goals). We believe that we must also do our bit to help achieve them. The Koehler Group’s 2030 Sustainability Strategy shows how we will bring all the financial, social, and environmental aspects together to create a more sustainable future. We have set clear goals that we want to achieve in six action areas. In the “A Visionary Approach to Climate Protection” action area, we have set out a roadmap in our climate strategy to take us from fossil fuels to renewable energy. We want to cut fossil fuel-based greenhouse gas emissions by 80 % by 2030, for example, and become completely carbon neutral by 2045.
Energy has to be sustainable and must not be based on fossil fuels.
CEO
Kai Furler
Kai Furler was born in Oberkirch in 1974 and is married with three children. After spending time in London and Paris, he completed a business administration degree at the Munich Business School in 1999 and then worked in various international positions to prepare him for joining the Koehler Group. Kai Furler started working at the company in 2003, becoming Commercial Director in 2007, and CEO in 2011. He represents the eighth generation at Koehler.
How are you going to achieve the goals in your climate strategy? Will you buy in green electricity from the market?
Dr. Stefan Karrer — We largely rely on our own plants to produce renewable energy, including a number of biomass power stations, hydroelectric plants, and wind turbines that are already up and running. In the future, we want to generate renewable energy from solar power on a larger scale too. Another important element of implementing our climate strategy is the decarbonization of our existing power plants. We have taken the first major step toward this by converting our pulverized lignite power station at our Greiz site. In future, Koehler will use wood chips, green waste, and mill residue as fuel instead of coal. The advantage of using biomass as a fuel is that not only is it carbon neutral, but it is also widely available. We will only use natural wood that comes from the surrounding region and that is at the end of its usability as a material. Because the fuel does not have to travel far, we will reduce our carbon footprint even further.
million euros was generated by the renewable energy division in 2023.
Even after the costly decarbonization of your power plants, there will still be some fossil fuels in use until 2045. What will the future look like in that respect?
Dr. Stefan Karrer — By 2045, we want to be completely free from fossil fuels, which also includes natural gas. As such, we’re currently running feasibility studies to determine if we can replace the natural gas that plays an important part in our paper production operations with sustainable green hydrogen. This is produced through electrolysis of water by using electricity that comes from renewable energy sources and is widely seen as future technology for industrial applications. We are confident we will develop solutions with our partners in the near future that will move us closer to our goal for 2045.
We want to cut fossil fuel-based greenhouse gas emissions by 80 % by 2030 and become completely carbon neutral by 2045.
COO
Dr. Stefan Karrer
Dr. Stefan Karrer was born in Augsburg in 1965 and is married with two children. Before he became COO of the Koehler Group in 2016, he held various senior management positions in the paper industry, such as managing director of the Sappi Group paper mill in Alfeld. He is on the board of various professional bodies, including Die Papierindustrie e. V., the German paper industry association. Dr. Karrer gained his doctorate from the Technical University of Graz in Austria.
Is sustainable action just a corporate philosophy or value, or is it worthwhile financially too?
Frank Lendowski — As a family company, we act sustainably and think in terms of generations. We also have a higher than average equity ratio and a healthy financing structure. That means we can make our decisions independently. We are investing more than 70 million euros in the decarbonization of our Oberkirch power plant alone. Ultimately, the market wants sustainable products from us – and that of course includes the energy we use to make them. What our customers expect of us is what we expect from our suppliers in terms of scope 3 emissions. The major investment in converting our power plant will of course pay off in the long term. We see our sustainable approach as a business model. The global conditions in which we are operating are becoming increasingly unpredictable, however. As an SME, we need planning certainty – particularly for large investments such as the conversion of our coal power plant.
What does your sustainable approach mean for the Koehler Group as an employer?
Frank Lendowski — First of all, our sustainable approach is necessary to secure the future of our business model. As a family company, we are committed to passing on a healthy company to the next generation. Second, a sustainable approach is essential if we are to be perceived as an attractive employer. For some time now, we have been questioned about this in almost every recruitment interview. We see this as a USP that makes us attractive to younger generations in particular on the labor market.
We are investing more than 70 million euros in the decarbonization of our Oberkirch power plant alone.
CFO
Frank Lendowski
Frank Lendowski was born in Dortmund in 1960, is married and has two children. He initially joined the Koehler Group in September 2010 as Finance Director and took over the Finance & Administration division as a member of the Management Board at the beginning of 2011. Prior to this, he was responsible for many years as Commercial Director for Finance and Accounting, Controlling, Human Resources and IT at an international luxury kitchen furniture manufacturer. During his professional career, Frank Lendowski has always worked in family businesses.
