Interview with Peter Seligson, Chairman of Antti Ahlström Perilliset Oy.
What are the signs that an industry is in decline? When is it time to divest from underperforming products and holdings? How does one know that such a drastic decision is the correct one?
For family businesses, especially those that have made their fortunes from a particular product or industry, it can be difficult to know when to ask the tough questions about the state of their companies. As generations of the family embed themselves into years of business tradition, it can become increasingly difficult to extract oneself from entrenched mindsets and objectively assess whether the time has come to part ways with what may be a dying industry.
Ahlström is a Finnish company whose origins can be traced back to 1851 when Antti Ahlström started a shipping business in the port city of Pori. Today, it is one of the largest enterprises in Scandinavia and is among the world’s leaders in fiber-based materials, which include nonwovens and specialty papers used in everyday products, such as filters, wipes, flooring, labels, and tapes.
The significance of the Ahlström’s story isn’t just that it boasts a tradition of entrepreneurship and business acumen that stretches back more than 170 years but that throughout its journey from a 19th century shipping company to a 21st century sustainable technology innovator, it has had the foresight to challenge not just its own business performance, but the overall direction of the very industries it was operating in. This foresight has led the company to on multiple occasions to divest from a number of business operations, often in key activities with years of history.
This adherence to cool logic and common sense is easy to see in Peter Seligson, chairman of the Board at Antti Ahlström Perilliset Oy and fifth generation family member. In this interview, Peter Seligson discusses the evolution of the Ahlström business, why family businesses can better avoid “quarterly amnesia”, and the role common sense plays in their business decision-making.
How did your own journey with the family business begin?
In the late 1980’s, and early 90’s, I was working with our subsidiaries in the packaging industry. And then in 1999, I joined the main board just at the point when we started to rethink our group structure. In the early 2000’s we create a private equity type holding company called Ahlström Capital.
We’ve always been business developers rather than guardians of the one single business. We continued with that mindset very strongly while we developed our core industrial operations, Ahlström-Munksjo.
I became Chairman in the midst of the financial crisis in 2008. We had made a series of overly-optimistic investments. So, we were actually in bad shape back then. But we knew early on that natural fibres would be the future. And so, we stuck to that vision as we built Ahlström-Munksjo over the last ten years.
As owners of a paper company, were you acting on what everyone was saying that the time, that we would soon be a paperless society?
We had already sold off all our printing paper business by 1987. Because we knew at that time, that the printing business is a commodities game. we would eventually be commoditised when technology caught up. So, for strategic reasons, we wanted out of the business. We sold all our commodity paper businesses in 87’, and focused on speciality materials. Since then that has been our main business at Ahlström-Munksjo and have developed it globally; today, we have 50% global market share in automotive engine filters.
We have built the papers; we are fifty percent global market share in car oil filters, engine filters. We do coffee pods. We do tea bags. We do all these things that you wouldn’t think of as paper. And the great thing is that most of the products are completely biodegradable – very modern. Plastic has to go. You know, we’re killing our planet. And much of our R&D is focused into replacing plastics. With packaging materials and in a lot of different applications, we have the natural alternative.
Ahlström has faced many industrial revolutions. Is the fourth industrial revolution we are going through different from its predecessors and how does your family business cope?
I’m a contrarian. And I think family businesses to a certain extent can be more contrarian than others. I know that people say everything is changing, and it’s so different. But I’m not so convinced about that. Change is a constant, and it is natural. And actually, at the moment, change is pretty slow.
120 years ago electricity conquered the world in a few years. We went from horse to Cars in New York city in 10 years. Those were fast and radical changes.
And I believe it’s changing slowly because there are so many vested interests that hold back change. Getting back to the plastics discussion, you see how clear it was to us 15 years ago that the planet is drowning in plastics. People and animals are dying every day, from plastics. It’s taken 15 years for other people to realise it, and still, they haven’t fully grasped it. Only now people are starting to talk about it.
Obviously, when you are involved in business, you will always be in flux. Change is in Ahlström’s DNA. We push forward in all our businesses and try to keep up. Not only are we trying to keep up. But we’re trying to keep ahead of the competition.
You’ve always been diversified, and then you started globalising, becoming internationally active. Can you tell us more about that pivotal moment and how it impacted the culture of the company?
When Antti Ahlstrom started in shipping, his ships went to Thailand in the first ten years of his operation. That was over 160 years ago.
Globalisation in a way is very natural because we have always thought that way and Finland is a very small country.
We have always focused on the things we were good at. This brought us possibilities around the world. In 1961 we bought an Italian mill, making us the first Finnish industrial company to make a foreign acquisition.