Accelerating Change - One Cup at a Time!

MM Kotkamills

8. Decent Work and Economic Growth 12. Responsible Consumption and Production 13. Climate Action 15. Life on Land

Overview

With fast-paced on-the-go lifestyles globally on the rise, the demand for to-go packaging solutions for food services is also on the rise and more and more disposable cups and containers are needed. However, while consumers spend more time and money to eat the healthiest and sustainably produced foods, the impact of packaging in which the food is delivered is often overlooked and too few disposables are recycled, even when they could be. MM Kotkamills’ innovation, a unique water-based dispersion coated barrier board named ISLA®, is addressing this problem since the water-based dispersion coated barrier board can be recycled similarly to regular paper waste. Moreover, since the material is biodegradable, it doesn’t harm nature even when not recycled.

Authors

Fabian Richter

Fabian Richter

Natalie Roth

Natalie Roth

Oona Niemenpää

Oona Niemenpää

Viktoriia Shishkova

Viktoriia Shishkova

School

Hanken School of Economics

Hanken School of Economics

Professor

Jouni Virtaharju

Jouni Virtaharju

Innovation

MM Kotkamills has taken on the mission to make to-go packaging solutions for food services as sustainable as possible by developing the ISLA® Barrier Board – a recyclable and renewable barrier solution for the foodservice industry. This is achieved by applying a unique water-based, dispersion coated barrier to natural virgin fibre carton board which can be easily recycled and repulped and is designed to run on existing machinery. This innovation was made possible by MM Kotkamills EUR 170 million investment into a new consumer board machine in 2016. After use, cups made of ISLA® board can be, unlike conventional polyethylene plastic-coated carton board, easily recycled along with normal paper and board waste.

The ISLA® Board thus ensures, through a profitable and growing integrated circular business model (growing sales by a Compound Annual Growth Rate of 80,54 % from EUR 11 million in 2016 to EUR 211 million in 2020), sustainable consumption and production patterns, via recyclability and fibre circulation, of food delivering solutions. The wood for the ISLA® Board is additionally sourced locally and responsibly from certified suppliers and is processed in a manner that, due to the new and efficient board machine, reduces CO₂ emissions in the production of the ISLA® Board which prevents landfills full of non-recyclable plastic containing food delivering solutions. The ISLA® Board thus highlights MM Kotkamills contributions to the SDGs 8 (decent work and economic growth), 12 (responsible consumption and production), 13 (climate action), and 15 (life on land) due to the protection of terrestrial ecosystems.

Accelerating Change - One Cup at a Time!

MM Kotkamills circular economy model

Inspiration

In our interview, Stefan Kuni shared an inspirational story about the starting point of this innovation. Markku Hämäläinen, the CEO of MM Kotkamills from 2015 to 2021, was sailing and noticed floating coffee cups in the sea which made him think how big of a problem that was. This was several years ago and the company he then had been working for, wasn’t interested in finding a sustainable solution. He got inspired to find recyclable material that does not contain plastic. In that way, ISLA® was founded and driven by the vision “to be in the forefront of innovation and a trusted, agile and successful partner in providing forest-based solutions in harmony with the environment in a changing world”.

Once Markku Hämäläinen got the idea of board material that is recyclable and biodegradable, he needed to find a mill and investors. After testing the material and concluding that it works, his employer at that time still didn’t want to start the production process with their machinery. “Our idea got fully rejected. The producers of board machines said that this doesn’t work and one cannot build that type of machine.” says Markku Hämäläinen in the interview with Yle in 2017. He didn’t give up but instead started to build the machine in a mill in Kotka in which his dad had worked. The fact that Markku Hämäläinen sacrificed his personal fortune on this innovation, reflects his dedication.

Overall impact

There are landfills full of plastic trash and only cleaning those areas is not a sustainable long-run solution. If the material itself was recyclable and biodegradable, this problem could be solved to a larger extent. Eco-friendlier options are often perceived as expensive and hard to find when people are in a hurry. This innovation combines convenience and fast-paced lifestyles with sustainable choices. Fast-food restaurants for example can start using products that are made of this material and therefore reduce waste, promote recycling and contribute to the environment. The core idea of this innovation is to reduce plastic by finding plastic-free alternatives as plastic is non-biodegradable or as Stefan Kuni emphasized in the interview: “.. The main focus is that if you have a coffee cup, you don’t need to think which bin you put it in. As long as you put it in some bin since it’s recyclable.”

ISLA® provides a possibility to form sustainable partnerships, in order to make a larger impact on society, as more companies use a recyclable material in their packaging. Evidence of such partnerships are the collaboration agreements that MM Kotkamills has signed with Lavazza Professional, the Norwich City Football Club from the English Premier League, the Levi World Cup and the Finnish hockey team KooKoo. When such innovations spread globally, these collaborations contribute to our society and business environment at a higher level. Moreover, MM Kotkamills can replicate their unique paperboard machine enabling the production of this material globally.

Business benefit

MM Kotkamills’ overall strategy is described as “…to be in the forefront of innovation and a trusted, agile and successful partner in providing forest-based solutions in harmony with the environment in a changing world.” The company, operating with 552 employees, achieved a revenue of EUR 381 million in 2020, which represents an increase of 11 % compared to 2019. Over 90% of the overall revenue as well as the revenue of ISLA® were generated outside of Finland. ISLA® is one important part of the company’s innovative circularity solutions to reduce littering and thereby stabilizes the circulation. Two important customers of ISLA® are Norwich City FC and Lavazza Professional. Norwich City FC has agreed to replace plastic cups with eco-friendlier options. Lavazza Professional developed the ecological KLIX Eco Cup™ made from ISLA® food service board in order to replace plastic cups in beverage vending machines. The new KLIX Eco Cup™ reduces the environmental impacts of cup production and usage by almost 2/3 compared to a standard paper cup, as shown in a life cycle assessment.

Social and environmental benefit

Neither using to-go cups again nor polluting nature with disposable cups really satisfies most people worldwide. The problem of disposable cups without plastic, without harming the environment nor the customer rose. To overcome this problem ISLA® as a water-based dispersion coated barrier board creates a perfect match between simple and user-friendly consumption and sustainability. The harmless and multifaceted character of the recycling process follows the idea of integrated circular business models. Additionally, if a cup is not recycled, the biodegradable material does not harm nature. Some of the less conspicuous benefits of the innovation in contrast to a normal paper cup are especially the responsible sourcing, low-impact of production and resource efficiency.

Interview

Stefan Kuni, R&D Director

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MM Kotkamills

MM Kotkamills

Kotka, FI

Business Website: https://kotkamills.com/

Year Founded: 2010

Number of Employees: 501 to 1000

MM Kotkamills is a producer of different types of wood-based products and is the oldest active sawmill in Finland, dating back to 1872. The Mayr-Melnhof Group, the largest producer of carton boards and folding cartons in Europe, acquired Kotkamills for around EUR 425 million in 2021. MM Kotkamills has three different but integrated business lines (Absorbex®, AEGLE®, ISLA®) with a key focus on sustainability and circular economy and operates two board/paper machines in Kotka (Southern-Finland). MM Kotkamills’ strategy focuses on profitability along the business cycle while having a clear customer focus and being a motivated organization at the forefront of innovation that acts in both a social and environmentally responsible way in line with its sustainability principles.