Wibax CEO Jonas Wiklund explains the company’s acquisition of Baltic Tank and looks to the future of the business
Swedish chemical supplier and trader Wibax grabbed headlines recently when it bought Baltic Tank, a chemical terminals operator in neighbouring Finland.
Prior to the acquisition of Baltic Tank, Wibax already had nine terminals in Sweden and another in Finland, with a total storage capacity of 450,000 m3, and offices in Sweden, Norway and Finland. Its main storage products include tall oil, pitch, mixed fatty acids, and chemicals, of which the two major products are caustic soda and sulphuric acid. In recent years it has also developed the biofuels side of the business, demand for which is growing in Sweden, particularly for heating.
Buying Baltic Tank added a further eight terminals in Finland including in Rauma, which has a capacity of 73,000 m3, Hamina, which has a capacity of 60,000 m3, and Kotka, which has a capacity of 50,000 m3, and a terminal in Kunda, Estonia, which has a capacity of 52,100 m3. Baltic Tank stores various bulk liquids including chemicals, oil products, biofuels, coating pigments and food-grade liquids.
LOGISTICS IS KEY
‘We have a vertically integrated business model. We don’t just buy and sell products but we add value with the logistics side that we control ourselves. We control everything apart from the ships, at least for now! We import products mainly from Europe but also from many other places around the world. The ships come into our terminals and we store the products in our tanks and deliver them to our customers either by boat, by railway, or normally by truck,’ says Wiklund.
Logistics is a big part of the vertically integrated Wibax business model, and Wiklund says it had great benefits.
‘At least from what I know in the Nordics we are the only big chemical supplier that owns and controls our own logistics. If you look at for example during this pandemic, we know where our trucks are, we know what they’re doing, we know who’s driving, and we can control it in a way that you cannot do if you don’t have the same business model,’ says Wiklund.
The customers see drivers who are not contractors, but direct employees of Wibax, adding a more personal touch, something Wiklund says is appreciated by the customers.
‘We can look at the logistics as a product, because we’re not just using the logistics for our own purposes, we’re also selling the service. Maybe today we’re using 30 or 40% of our logistics capacity ourselves and selling 60 or 70% capacity to others. We’re trying to sell to customers who can add value to our logistics, for example some of our customers are suppliers to others,’ says Wiklund.
The company’s customers are largely from the pulp and paper industry, one of the biggest industries in the Nordic region, and therefore its main focus, although they also serve customers in the mining industry and a few others.
This focus on pulp and paper was one of the drivers for the acquisition of Baltic Tank.
‘We work with all the big pulp and paper companies in Finland and Sweden, and we want to have good solutions for them in both countries, so it was important for us strategically for the future to be in both countries in an effective way,’ says Wiklund, adding: ‘We now have good coverage of the coastline from Uddevalla in the south of Sweden over to Kotka-Hamina in Finland. It’s a strategic move for continuous growth into Finland, not just for transport and logistics but also for the sales side.’
Hamina particularly is an important centre for the pulp and paper industry, and being so close to the border, also offers potential for expansion into Russia, which Wiklund describes as a ‘big opportunity’.
Wibax expanded into Finland relatively recently, but the business grew rapidly and the company saw the need to have more storage and logistics in the country.
‘If you don’t have the tanks or the terminals it’s quite a big threshold to have – it’s a lot of investment,’ says Wiklund, adding that buying Baltic Tank was the perfect opportunity. The extra capacity will mean that the company can be more cost effective, and customers will benefit from alternative solutions and lower costs.
DEMAND IS CHANGING
Wiklund is not concerned about the demand for storage in the future, in the Nordics at least. At the moment, demand at Wibax is still growing, a trend that has increased during the COVID-19 pandemic.
‘We are doing business with the type of customers that are normally not that sensitive to downturns in the economy. The stops planned for the factories are being postponed so they’re actually using more product,’ says Wiklund. ‘The paper industry for example is going well, so we are selling more of our products than we did before.’
Wibax’s capacity is more or less full, and Wiklund does not expect the capacity demand to change. What is likely to change is what is being stored, and the tank size.
‘If you look at the world, it’s changing from oil to other sources of energy. The total need for storage will stay largely where it is today for quite a long time but I think that at least for the Nordics there will be more products, so there will need to be more tanks but smaller tanks,’ says Wiklund, adding: ‘We have built some new tanks, but they are smaller and more specialist tanks made from stainless steel, and 5-10,000 m3 rather than a huge tank of 20,000 m3 or more.’
A VIABLE FUTURE
Wibax is a family-owned company, founded by Wiklund’s father, and his two brothers also have important roles within the company. Wiklund says that as a family company, one of the important things for them, especially looking forward, is diversity and integration.
‘We want to be a company that promotes integration. It’s important for me and for the company to show that we are all the same, that all are welcome, due to all the terrible, racist things that are happening across the world,’ says Wiklund.
Earlier in 2020, they launched the Wibax Academy. In the past couple of years, Sweden has welcomed relatively large numbers of immigrants, and the Academy offered them the chance to work for the company for a couple of months. Wiklund says that around 15 people joined and tried out various types of work. Around half are still working for the company and will likely be taken on permanently.
‘Programmes like the Wibax Academy are good for the company and good for our employees. We have more good, competent people working for us, and it helps others,’ says Wiklund.
Being a sustainable company in an environmental sense is also very important for Wibax. Wiklund says that although the pulp and paper industry still provides the bulk of Wibax’s turnover, the biofuels side of the business is growing. Sweden is pushing a green agenda, and in a country where heating is essential in the colder months of the year, the use of biofuels is growing, so they are selling more.
They are not only selling biofuels, however, the company is using biofuels too, to fuel the boilers for its heated tanks. Wibax describes itself as a sustainable chemicals supplier.
‘Sweden as a country would like to be more sustainable and we as a company want to be more sustainable and help others to be more sustainable,’ Wiklund says.