Story 01

Sustainable and ready for the future

Specialty paper and renewable energy are the pillars of the Koehler Group, which is now in its eighth generation of family management – with lasting success. What challenges must the company overcome to stay fit for the future and the next generations? What role does sustainability play? An interview with Board of Management members Kai Furler, Dr. Stefan Karrer, and Frank Lendowski.

What links do you and the Koehler Group have to Oberkirch?

Kai Furler — Wine is part of our region just like Koehler is part of Oberkirch. We still own meadow orchards and a vineyard. The produce is used to make our own apple juice and wine. We serve Riesling, Pinot Gris, and Pinot Noir – which we bottle under the ‘August Koehler Erben’ label – at corporate events. Our customers also love it when we bring a bottle with us as a little gift – it’s not something paper manufacturers do every day! The cabin – which is also owned by the company – in the middle of the vines has a history of its own. Lovers used to meet there, so the story goes. You get an amazing view from there over our headquarters and can see almost the entire site. As CEO, I am the eighth generation of the family to head the Koehler Group. Oberkirch is very special to me – it’s where my roots are. I can clearly remember when my Grandpa Werner Koehler managed the company as the sixth generation and I often visited him in his office. He succeeded in developing new varieties and products with a higher level of finishing in addition to the fine paper range.

It was way back in 2010 that you decided to invest in renewable energy as a second, major pillar of the Koehler Group – besides specialty paper. Do others in the paper industry envy you today because of this?

Kai Furler — Fundamentally, Koehler has relied on renewable energy since the company was established in 1807. Otto Koehler used hydropower with our first paper mill. Paper production is energy intensive. That’s why I decided more than ten years ago that we would make a major move into renewable energy generation by founding Koehler Renewable Energy. Energy has to be sustainable and should not be based on fossil fuels; in the long term it simply won’t be able to do so. A few eyebrows may have been raised back then but it has paid off since. Koehler Renewable Energy achieved revenue of 165 million euros last year. We covered about 69.9 percent of our electricity demand in paper production with our own renewable energy in 2022. By 2030, we will generate all of the energy we need through renewable sources on a balance sheet basis – with our own plants.

How does renewable energy fit into Koehler‘s sustainability efforts?

Dr. Stefan Karrer — The global community has undertaken to combat anthropogenic climate change and to significantly reduce the release of greenhouse gases into the atmosphere. The use of fossil fuels must be limited as much as possible to achieve this. Our climate strategy is part of our sustainability strategy and sets out a roadmap of how we can become more efficient and replace fossil fuels with renewable energy. We were able to celebrate our first success with the conversion of the power station in Greiz from pulverized lignite to fine wood fraction. The next major step is the coal-fired power plant in Oberkirch. We are investing more than 70 million euros in the conversion to biomass as fuel. By using biomass instead of coal, we will cut our direct CO2 emissions by 150,000 metric tons per year.

2030

By 2030, Koehler will generate all of the energy it needs through renewable sources on a balance sheet basis – with its own plants.

You say your sustainability strategy is also your corporate strategy. Aren‘t they two different things?

Kai Furler — A lot of companies are at a crossroads in terms of their business direction. Can a business model remain unchanged, even if, for example, the costs of greenhouse gas emissions and their consequences are borne by the general public? It may work in the short term, but is it going to be sustainable?

This is simply not an issue for us. We think in the long term and have a responsibility to leave behind a healthy, high-performing company and a thriving environment for future generations. That’s why our sustainability strategy is also our corporate strategy. It determines how we will balance financial, social, and ecological factors and shape a sustainable future. We are committed to sustainable products, renewable raw materials, responsible use of resources, and a visionary approach to climate protection, and we see people as the key to success. We need to bring the entire company along with us on this journey. The transformation is already underway.

„We covered roughly 70% of our electricity requirements in paper production with our own renewable energy in 2022.“

Kai Furler

CEO

The circular economy is often referred to as a form of leverage when it comes to sustainability.

Dr. Stefan Karrer — Paper is a good example of successful circular value creation – and has been for some time. The Koehler Group is part of this chain. For example, with our flexible packaging paper, we offer future-proof solutions that are based on sustainable raw materials and can be recycled as wastepaper, unlike other materials. They are being developed with circular value creation in mind – which can also be extended to other product lifecycles.
Relatively speaking, Germany and Europe are not rich in raw materials. Repeatedly reusing the same material can reduce raw material shortages and make it possible to boost local and regional value creation. Global revenue from the circular economy may have reached 148 billion euros in 2020, but it is forecast to hit 263 billion euros in 2030. There is huge potential there. Companies that can bring innovations and circular business models to the market will be the ones who succeed. Consequently, an important part of our sustainability strategy, besides the focus on digitalization and start-ups, concerns our innovative strength.

„Paper is a good example of successful circular value creation.“

Dr. Stefan Karrer

COO

How is Koehler managing to finance this transformation and make it through periods of weak sales?

Frank Lendowski — The benefit of being a family company is that we do not make short-term decisions, in contrast to companies listed on the stock market, for example. We think in terms of generations. As a fighting-fit family enterprise we can weather economically challenging periods. This is largely down to our exceptionally high equity ratio, our healthy financing structure, and our successes in past financial years, which also form a sound basis for our sustainable corporate development. That is what drives us forward, along with the fact that we want to pass on a healthy company to future generations.

Given the current shortage of skilled workers, employees are increasingly becoming a success factor. How is Koehler approaching this?

Frank Lendowski — Despite all the state-of-the-art technology we use, it is people who are the beating heart of our company. They are the key to our success. Because of the high standards we set for our products and services, every single person must demonstrate technical and social skills, team spirit, responsibility, diligence, and a passion for their work. The numerous years of service notched up by many of our employees show us that they share our vision, and this is something we are proud of.

We have not escaped the skills shortage in the industry unscathed. We are currently working to counteract them through a range of different measures and new plans.

What makes Koehler different? We make a point of appreciating our staff – even beyond their working life. For example, we regularly celebrate our former employees at a party for retired staff. Every year, we honor employees who reach work anniversaries. Our workforce is the key to the successful implementation of our sustainability strategy. Each and every individual can play a part in ensuring that we achieve our goals by 2030 and our descendants have a life worth living. We can only do this by working together.

„Our workforce is the key to the successful implementation of our sustainability strategy.“

Frank Lendowski

CFO

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