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Kemira: The Finnish Chemistry Company That Reinvented Itself Three Times
Introduction & Episode Roadmap
In the quiet lakeland of southeastern Finland, at the turn of 1922, workers fired up the boilers at a newly constructed sulfuric acid plant in Lappeenranta. The young nation—Finland had achieved independence from Russia just five years earlier—desperately needed this chemical infrastructure to feed its farmers and establish economic sovereignty. The humble enterprise they were building would one day become Kemira, a EUR 2.9 billion global leader in sustainable chemical solutions for water-intensive industries.
In 2024, Kemira reported annual revenue of EUR 2.9 billion with a global team of some 4,700 colleagues. But this company looks nothing like what its founders envisioned over a century ago. The fertilizers that defined Kemira's first eight decades are gone. The paint business that made Tikkurila a household name across Scandinavia and Russia—spun off. The oil and gas chemicals that generated hundreds of millions in revenue—divested in early 2024.
Today, Kemira holds strong market positions: #1 in water treatment in Europe and #2 in the pulp and paper business globally. The company operates 57 sites globally in 40 different countries, maintaining proximity to customers across every continent where water needs chemistry.
The central question of this story: How did a state-owned Finnish fertilizer company founded to feed farmers become a global sustainability champion focused on water chemistry? The answer involves three major divestitures—GrowHow (2004), Tikkurila (2010), and Oil & Gas (2024)—that systematically stripped away legacy businesses while doubling down on water and fiber chemistry.
Kemira's main shareholder is Oras Invest Oy and its owners, members of the Paasikivi family. Its former main owner, the State of Finland through Solidium, sold the largest part of its holding to Finnish investors in August 2007 and divested its remaining shares in 2023-2024. This transition from state-owned enterprise to family-controlled public company represents one of the most disciplined portfolio transformations in Nordic industrial history.
The themes running through this story are profound: how governments can successfully privatize strategic assets, why portfolio transformation through divestiture sometimes creates more value than holding, and how the water megatrend is reshaping the specialty chemicals industry.
Finland's Independence & Founding Context (1920s)
Picture Helsinki in early 1920. Finland had only declared independence from Russian domination in December 1917, and the nation still bore fresh scars from a brutal civil war that followed. The new Finnish government faced an existential question: how could a small Nordic country of just three million people establish economic self-sufficiency?
Finland's independence from Russian domination following World War I presented new challenges for the country. In particular, the new Finnish government sought to establish self-sufficiency for the country's agricultural and industrial sectors. In order to supply the raw materials needed for the development of these sectors, the government targeted the creation of a domestic industrial chemicals industry.
The strategic calculation was straightforward but ambitious. Finnish farmers depended entirely on imported fertilizers—a vulnerability that the Great War had exposed with devastating clarity. Among the earliest components of this strategy was Valtion Rikkihappo-ja Superfosfaattitehtaat Oy, or the State Sulfuric Acid and Superphosphate Plants, established in 1920.
On March 1, 1920, the Council of State (Finland) established a committee to start and maintain the state-owned Sulfuric Acid and Superphosphate Plants. Parliament approved the appropriation for the establishment of the plants on March 26, 1920 and Kemira was founded with Felix Hedman as Managing Director.
Hedman, the company's first leader, faced the practical challenge of building industrial infrastructure from scratch. One of the new plant's first and largest customers was the state-owned gunpowder production plant in Vihtavuori. Construction began on a sulfuric acid plant in Lappeenranta, and, in Kotka, a production facility for superphosphates.
In spring 1922, the Lappeenranta sulfuric acid plant and Kotka A superphosphate plant was established, which marks the beginning of domestic fertilizer production. Within a few years, the operation achieved respectable scale: production reached 20,000 tons of sulfuric acid and 40,000 tons of superphosphates annually by decade's end.
But the young enterprise soon faced its first crisis. The worldwide depression set in motion by the 1929 US stock market crash also reached Finland, leading to decreased demand for fertilizers and scaled down production. The company survived through state support and incorporated as the Sulfuric Acid and Superphosphate Plants Corporation in 1933.
The early decades taught lessons that would echo through Kemira's later transformations: the importance of strategic patience, the value of state backing during crises, and the vulnerability of commodity businesses to economic cycles. Felix Hedman's death led to new leadership—Fredrik Gustaf Hackzell was appointed Manager in 1935—but the fundamental mission remained unchanged. Finland would produce its own fertilizers.
Post-War Expansion & Diversification (1950s–1970s)
The aftermath of World War II and Finland's painful "Winter War" with the Soviet Union catalyzed a new era of industrial ambition. The country had survived, but barely. National reconstruction required domestic chemical production at unprecedented scale.
A significant cooperative arrangement emerged in 1952 when the state-owned fertilizer companies signed a partnership agreement. Martti Hovi became Managing Director after Hackzell's retirement in 1955, ushering in an era of aggressive expansion.
By 1957, the company founded Vuorikemia Oy to manufacture titanium dioxide pigments using sulfuric acid as a raw material, marking entry into the pigments sector for paints and coatings. In 1960, Kemira launched an aluminum sulfate plant in Harjavalta, enhancing its capabilities in water treatment and paper chemicals.
This aluminum sulfate plant at Harjavalta deserves special attention. The chemical served two markets: paper manufacturing and water purification. In retrospect, this 1960 facility planted the first seeds of Kemira's modern water treatment business—though no one at the time could have predicted the company would eventually stake its entire future on water chemistry.
The adoption of a new acquisition-driven growth strategy, starting in the 1960s, transformed the company into one of Finland's largest corporations and into a leading chemicals group in the Nordic region. One of the group's earliest acquisitions was that of Vuorikemia, which produced titanium dioxide-based pigments. That purchase, made in 1968, permitted the group to extend itself into finished paint and dye products and also became one of its earliest avenues to the export market.
The 1970s brought consolidation and rebranding. The state-owned fertilizer companies Rikkihappo Oy and Typpi Oy signed a merger agreement on June 11, 1971, resulting only one state-owned fertilizer producer left in Finland: Rikkihappo Oy. Rikkihappo Oy's name was changed to Kemira Oy on July 1, 1972. The new name came about through a naming competition for employees and is thought to come from the Finnish words for chemistry, minerals and nutrients: kemiaa, mineraaleja and ravinteita.
The 1972 name change coincided with an acquisition that would shape Kemira's next four decades. In May 1972 all shares of Oy Schidlt & Hallberg Ab were transferred to Kemira. The company acquisition was a significant expansion into the paint industry. The subsidiary named Tikkurilan Väritehtaat Oy became one of our most essential supporting pillars for decades.
Tikkurila traced its roots to 1862, when Lieutenant Colonel Anders Lorentz Munsterhjelm received permission to establish an oil press in the Tikkurila district. The paint operation had grown into Finland's leading decorative paints company. Under Kemira's ownership, it would expand across the Nordic region and deep into Russia, becoming a genuine consumer brand.
By 1975, the company had diversified far beyond its fertilizer origins. The chemicals-minerals-nutrients name encapsulated reality: Kemira operated across agricultural chemicals, industrial chemicals, pigments, and paints. The state remained the controlling shareholder, providing patient capital for long-term investment.
International Expansion & Conglomerate Era (1980s–early 1990s)
The 1980s marked Kemira's transformation from a Finnish national champion into a true multinational conglomerate. The decade began with a symbolic milestone: The Siilinjärvi phosphate mine was opened on March 26, 1980, our 60th anniversary. The phosphate obtained in Siilinjärvi was exceptionally pure, which ensured a competitive advantage for the fertilizers produced from it.
Domestic expansion continued aggressively. The company added formic acid production in Oulu, an ammonia plant, and hydrogen peroxide facilities. The company also branched out into fine chemicals with the launch of a new plant at its Kokkola site.
But the real story was international expansion. Kemira found it important to respond to the expansion of its Norwegian competitor Norsk Hydron and acquired the British Lindsey & Kestevan Fertilisers Limited in 1982. This marked Kemira's first major move outside Finland.
The European footprint expanded rapidly: a fertilizer plant in the Netherlands in 1984, followed by the Gechem fertilizer factory in Belgium in 1985. By mid-decade, Kemira had established presence across the European fertilizer market.
Then came a pivotal acquisition that would prove far more significant than it appeared. In 1989, The Swedish Boliden Kemi AB, a traditional pulp and paper industry expert who also had strong hydrochemistry expertise was acquired. Providing a solid foundation in Europe, we continued acquisitions in the hydrochemistry industry. As a result, hydrochemistry expertise quickly became one of our cornerstones at Kemira.
The Boliden Kemi acquisition deserves special emphasis. This Swedish company brought deep expertise in both pulp and paper chemicals and water chemistry—the two businesses that would eventually define modern Kemira. At the time, it looked like just another diversification move. In hindsight, it was a strategic pivot point.
Not every diversification succeeded. Kemira had faith in the rise of biotechnology, investing in gene technology and biotechnology. However, the biotechnology group couldn't fulfill its goals, and we broke away from the industry during the 1990s. This expensive lesson in the limits of diversification would inform later strategic discipline.
By 1991, Kemira was forced to restructure its operations. In that year, the company reformed its operations into a number of wholly owned subsidiaries, including Kemira Agro, Kemira Chemicals, Kemira Fibres, Kemira Pigments, Kemira Metalkat, Kemira Safety, Kemira Engineering, and the Tikkurila paint operations. As part of the company's restructuring effort, it shed some 28 percent of its payroll.
The restructuring set the stage for a long-awaited milestone. The restructuring took place ahead of Kemira's public offering, which at last came off in 1994. Kemira's listing came as part of a wider Finnish government privatization plan that also resulted in the public offering for telecommunications giant Nokia. The trading code is KEMIRA on OMX, with listing date November 10, 1994.
The company that went public in 1994 was an unwieldy conglomerate: fertilizers, paints, pigments, paper chemicals, water treatment chemicals, and various industrial chemicals. The state retained majority ownership, but the public listing marked the beginning of a transformation that would take three decades to complete.
Strategic Refocus & The 1999 Pivot
The late 1990s brought clarity. After years of expansion, Kemira's leadership recognized that a sprawling conglomerate structure diluted capital allocation and management attention. The company needed focus.
Kemira launched a new strategic review at the end of the 1990s and in 1999 announced its decision to refocus itself around three core businesses—pulp and paper chemicals, paints and pigments, and water treatment chemicals. By 2001, the company had launched an active divestment program, cutting out some one-third of its operating revenues.
This "focus to win" strategy represented a philosophical shift from growth-through-acquisition to value-through-concentration. Management articulated a clear thesis: Kemira should compete in markets where it could achieve leadership positions, exiting businesses where it would remain a marginal player.
In 2001, the company boosted its paints operations with the acquisition of Sweden's Alcro Beckers, originally founded in Sweden in 1865. That purchase made Kemira the Scandinavian region's largest paint manufacturer.
But the strategic review also attracted unwanted attention. Kemira's independence appeared in doubt later that year when Industri Kapital, behind the creation of Nordic chemicals giant Dynea, approached Kemira with a takeover offer that would have created a global chemicals giant with sales of more than EUR 25 billion. That offer failed, however.
The failed takeover attempt revealed something important: Kemira possessed valuable assets that strategic buyers coveted. Rather than waiting for another acquirer, management accelerated plans to unlock value through structural transformation.
Instead, Kemira announced its intention to find a buyer for its Kemira Agro division. Yet the difficult economic situation at the beginning of the century put that effort on hold as well. Kemira Agro was then renamed as Kemira GrowHow.
The stage was set for Kemira's first major inflection point: divesting the fertilizer business that had defined the company since 1920.
INFLECTION POINT #1: The GrowHow Spin-off (2004)
The decision to spin off Kemira GrowHow in 2004 ranks among the most strategically significant moves in Finnish corporate history. The company was voluntarily divesting its founding business—the reason for its very existence—to pursue higher-margin specialty chemicals.
In 2004, Kemira spun off its then-largest division, Kemira GrowHow, as an independent, publicly listed company. GrowHow was the holding company for Kemira's agro-chemicals division.
Kemira's operations were started in 1920, and Kemira Growhow was separated from the rest of Kemira in 2004. In 2004, Kemira Growhow had 2,700 employees, a revenue of 1,220.9 million euros, with profit 47.8 million euros.
The spinoff of GrowHow shaved off some EUR 1 billion from Kemira's annual revenues. The streamlined Kemira entered 2005 off and running.
The logic was compelling. Fertilizers are fundamentally commodity businesses, subject to agricultural cycles, weather patterns, and fierce price competition. Specialty chemicals for pulp and paper, water treatment, and paints offered higher margins and more stable customer relationships. By separating the businesses, each could pursue strategies appropriate to its market dynamics.
The GrowHow listing on the Helsinki Stock Exchange in October 2004 validated this thesis. As an independent company, GrowHow could focus entirely on agricultural chemicals without competing for capital with higher-margin divisions.
Post-spin-off, Kemira moved aggressively to strengthen its remaining businesses. In February 2005, for example, the company acquired Finnish Chemicals Oy, a producer of chemicals for pulp and paper, water treatment, and other industries; and Verdugt, based in The Netherlands, and the world's top producer of organic salts.
What happened to GrowHow? On 24 May 2007, Yara International, a Norwegian rival, bought 30.05% of the company from the Finnish State and offered to buy the rest, valuing the company at 671.8 million euros. Yara was established in 2004 as a fertiliser producer through a demerger from the Norwegian Norsk Hydro Group. Yara is the world's largest fertiliser company measured by revenues and the leading producer of nitrogen fertilisers.
The Yara acquisition validated Kemira's spin-off decision. GrowHow found a natural home with the world's largest fertilizer company, while Kemira received capital to invest in water and pulp chemistry. The founding business had been successfully separated and sold—a clean exit that released value for all stakeholders.
INFLECTION POINT #2: The Tikkurila Spin-off (2008–2010)
If the GrowHow spin-off represented strategic pruning, the Tikkurila separation was strategic surgery. The paints business had been part of Kemira for nearly four decades and represented a genuine consumer brand with strong positioning in Northern Europe and Russia.
In June 2008, Kemira announced a new strategy according to which Kemira focuses on serving water intensive customer industries. As a part of the new strategy, Kemira announced its intensions to separate Tikkurila and list its shares.
Kemira's Board of Directors has made a strategic decision to concentrate on water and fiber related businesses in the future. Kemira will initiate a spin-off process to turn Tikkurila, its coatings business area, into a public company owned by Kemira's current shareholders and potential new shareholders on the Helsinki Stock Exchange. This will take place during the first half of 2009.
The timing was challenging. The 2008 financial crisis delayed execution, but management persisted with the strategic vision. "These structural changes are part of the strategic development plan for Kemira and they aim at continuous growth of the long term shareholder value" says Pekka Paasikivi, Chairman of the Board of Kemira Oyj. "The listing of Tikkurila will increase transparency of Kemira's businesses and it will be a good way to enhance the value of Kemira's total business portfolio."
Note the speaker: Pekka Paasikivi, representing the Paasikivi family's Oras Invest, which had become Kemira's largest shareholder following the state's 2007 share sale. The family's long-term industrial ownership philosophy aligned perfectly with Kemira's portfolio transformation strategy.
Tikkurila was spun-off from Kemira in late March into a separate listed company and trading with Tikkurila's shares commenced on March 26. As a result of Tikkurila's separation, Kemira's financial position improved further.
In March 2010, Tikkurila was listed on the Helsinki Stock Exchange and we distributed 86 percent of its shares as dividends. With the separation of Tikkurila, we lost a significant part of its turnover, but at the same time, it was an expression of the new strategy.
The mechanics were elegant: Kemira shareholders received one Tikkurila share for every four Kemira shares held, transferring 86% of the paints business directly to shareholders. Kemira retained a 14% stake to participate in potential upside.
For the year ended December 31, 2009, Tikkurila's net revenue was EUR 530.2 million and its operating profit amounted to EUR 47.7 million. The separated company was substantial—but it didn't fit Kemira's new "water-intensive industries" focus.
The financial impact was significant. Net debt declined substantially, and capital was freed for water chemistry acquisitions. More importantly, Kemira had achieved strategic clarity. No longer a diversified industrial conglomerate, the company was now a focused specialty chemicals player serving pulp, paper, and water customers.
The market initially responded negatively—Shares in Finnish chemicals firm Kemira fell 28.7% on Wednesday, reflecting the upcoming spin off of paints unit Tikkurila—but long-term shareholders understood the strategic logic. A smaller, more focused Kemira could command higher multiples than a sprawling conglomerate.
Building the Water Chemistry Leader (2010–2020)
With fertilizers and paints divested, Kemira entered the 2010s as a pure-play on water chemistry and pulp/paper chemicals. The company's vision crystallized: become the world's leading water chemistry company.
As we focused on our water-related businesses aligned to our strategy, the Kokkola sulfuric acid plant was sold to Boliden Kokkola Oy on 1 May 2010 and the formic acid business to Taminco on December 23, 2013. On July 1, 2013, Kemira announced the acquisition the Italian 3F Chimica, a producer of polymers for industry and wastewater treatment strengthening its position as one of the leading international polymer manufacturers.
The 3F Chimica acquisition exemplified the new strategic discipline: expand in water treatment polymers, divest legacy chemical businesses. Every transaction either strengthened the core or removed distractions.
In 2019, we announced significant capacity extension of our ferric sulfate water treatment chemicals production line in Goole, UK to address expected market demand for coagulants used in water treatment, driven by stricter regulation regarding e.g. phosphorus removal. We also broke ground on a polymer expansion at our Mobile, USA site and added sodium chlorate capacity to our Eastover, USA plant.
The investment pattern was consistent: capacity expansions in water treatment chemicals across Europe and the Americas, targeting markets where tightening environmental regulations drove demand for coagulants and flocculants.
In February, we announced challenging new climate change targets to reach carbon neutrality by 2045. Sustainability became central to Kemira's positioning. The company served industries where water efficiency and environmental compliance were non-negotiable—aligning commercial success with sustainability outcomes.
On March 26, 2020, Kemira celebrated its 100th anniversary. The centennial milestone invited reflection: a state-owned fertilizer company had transformed into a global water chemistry leader. But the transformation wasn't complete. One legacy business remained—Oil & Gas chemicals—that would require another major divestiture.
Jari Rosendal, who had served as President and CEO since 2014, led Kemira through this period of strategic execution. Jari was a leader whose main focus was always the safety and wellbeing of employees. Under his leadership, Kemira's profitability improved significantly and the strategic focus shifted towards sustainable profitable growth.
"Jari Rosendal has an impressive record with a vast international experience of leading businesses in global markets. He is an inspiring leader known for his strong customer orientation and commercial focus."
INFLECTION POINT #3: Oil & Gas Exit (2023–2024)
The final piece of Kemira's portfolio transformation came with the decision to exit Oil & Gas chemicals. While this business had grown to meaningful scale, it didn't align with the company's sustainability focus or water treatment expertise.
Kemira has signed an agreement to divest its Oil & Gas-related portfolio to Sterling Specialty Chemicals LLC, a US subsidiary of Artek Group, a global industrial chemicals group based in India. The transaction enables Kemira to focus on its core businesses and accelerate its profitable growth strategy. Kemira and Sterling Specialty Chemicals LLC will also enter into a long-term partnership, consisting of contract manufacturing agreements in both directions.
The revenue to be carved-out from Kemira was around EUR 430 million in 2022. This includes Kemira's Oil & Gas business, which had a revenue of EUR 373 million in 2022. The remaining carved-out revenue of around EUR 57 million consisted of non-Oil & Gas industrial polymer sales through indirect channels.
The total consideration on a cash and debt-free basis amounts to approximately USD 280 million, around EUR 260 million with today's exchange rate, subject to ordinary closing adjustments.
On February 2, 2024 Kemira announced it has completed the divestment of its Oil & Gas related portfolio to Sterling Specialty Chemicals LLC, a US subsidiary of Artek Group, a global industrial chemicals group based in India. The divestment was announced on December 4, 2023.
"The divestment of the Oil & Gas business will clarify our focus on sustainability and our strategic priorities: we want to expand in water, build a leading renewables portfolio and digital services business. This move strengthens our capability to look for growth within our water treatment and Pulp & Paper businesses and also to explore new growth opportunities. With Sterling Specialty Chemicals LLC, we have found a committed owner for the Oil & Gas business enabling it to grow further."
The divested Oil & Gas-related portfolio had a revenue of around EUR 495 million and an operative EBITDA of around EUR 71 million in 2023. The divestiture reduced Kemira's reported revenue by roughly 15%, but the strategic clarity was worth the reduction in scale.
The timing was poignant. Our long-serving President & CEO Jari Rosendal passed away unexpectedly on July 31, 2023. Jari Rosendal Death — On July 31, 2023, longtime President and Chief Executive Officer of Kemira Jari Rosendal passed away following a brief battle with sickness. Since 2014, Jari Rosendal, who was 58 years old at the time, had served as President and CEO of Kemira.
His vision and leadership were instrumental in shaping Kemira into what it is today. We honor his legacy and continue to execute our sustainable profitable growth strategy.
The transition to new leadership occurred as the Oil & Gas divestiture closed. Antti Salminen starts his new role today February 12, 2024. Petri Castrén has been the Interim President & CEO since August 2023 after Kemira's long time President & CEO Jari Rosendal unexpectedly passed away in late July.
Antti Salminen has had several prior leadership positions in Kemira, latest as President, Pulp & Paper segment and before that President, Industry & Water segment. He has been a member of Kemira's Management Board since 2011. He has a PhD in engineering.
Modern Era: Water & Sustainability (2024–Present)
With the Oil & Gas divestiture complete, Kemira entered 2024 as the focused water chemistry company its leadership had envisioned for over a decade. Kemira updated its strategy and the focus is on profitable growth. The aim is to double the revenue from the 2024 level in water in the long run. In addition, new long-term financial targets were announced.
Both the operating model and the organization were renewed to accelerate the growth strategy. As of January 2025, Kemira has three business units: Water Solutions, Packaging and Hygiene Solutions and Fiber Essentials.
The renamed business units reflected strategic priorities. Water Solutions—the growth engine. Packaging and Hygiene Solutions—capitalizing on the shift from plastic to fiber-based packaging. Fiber Essentials—serving the mature but stable pulp and paper market.
Kemira announced on September 25, 2024, that its Board of Directors had approved the company's updated long-term financial targets. Kemira's target for average annual organic growth has been changed to over 4% (previously: above the market growth) and the operative EBITDA margin target has been increased to 18–21% (previously 15–18%).
The acquisition strategy accelerated. During 2024, Kemira announced several investments in to expand its service offering in water treatment in line with its updated growth strategy: coagulant capacity expansion in Spain and Norway and an entry into the activated carbon market for micropollutant by acquiring Norit's reactivation operations in the UK.
This acquisition is the first step for Kemira in entering the activated carbon market for micropollutants removal. Activated carbon is the most common technology to remove odor and taste in drinking water, as well as micropollutants including per- and polyfluoroalkyl substances (PFAS) in water treatment applications.
The PFAS opportunity deserves attention. Regulatory pressure to remove these "forever chemicals" from drinking water is intensifying across Europe and North America. Kemira's entry into activated carbon positions the company to benefit from this regulatory tailwind.
Kemira expands its offering into industrial water treatment services and has signed a purchase agreement to acquire Water Engineering, Inc., a company specialized in water treatment services with headquarters in Nebraska, USA, from Nolan Capital, Inc. The purchase price is approximately USD 150 million in cash, subject to the usual purchase price adjustments. The transaction is expected to close before the year-end 2025, following regulatory approvals and customary closing conditions.
The acquisition strengthens Kemira's strategic position in the North American market and expands its capabilities in water treatment services. The transaction was announced on August 30, 2025, and has now been completed following customary closing conditions.
Perhaps most innovative is the IFF partnership for renewable polymers. Kemira and IFF today announced that they have taken the final investment decision and move forward in forming a joint venture manufacturing company to produce renewable biobased products on a commercial scale. Total investment is estimated at around EUR 130 million and commercial production is expected to start in late 2027. Both companies will have a 50% stake in the joint venture. Kemira and IFF have been collaborating in a strategic partnership since 2020.
"Our partnership with Kemira has reached a significant milestone, enabling us to scale the production of groundbreaking biobased materials to meet the large and growing demand for high-performing and sustainable alternatives to fossil-derived polymers," said Erik Fyrwald, IFF CEO.
In 2024 Kemira joined a group of only ~160 chemical companies who have validated science-based climate targets. The sustainability credentials are genuine, not greenwashing—essential for a company whose business model depends on helping customers meet environmental regulations.
Playbook: Business & Investing Lessons
Kemira's 105-year journey offers a masterclass in portfolio transformation. Few companies have executed such a systematic transition from diversified conglomerate to focused specialty player.
Portfolio Transformation Discipline
The path from fertilizers to water chemistry required three major divestitures executed over two decades. Each transaction—GrowHow (2004), Tikkurila (2010), Oil & Gas (2024)—followed a consistent logic: exit lower-margin or non-core businesses to invest in higher-margin, strategically aligned opportunities.
The discipline required patience. Management didn't panic when markets initially questioned each divestiture. They communicated the strategic rationale clearly and let results validate decisions over time.
Strategic Patience
Each inflection point took years of preparation and execution. The GrowHow spin-off was first contemplated in the early 2000s but executed in 2004. The Tikkurila separation was announced in 2008 but completed in 2010. The Oil & Gas divestiture discussions began in 2023 and closed in early 2024.
This patience reflected understanding that complex transactions require careful structuring, buyer identification, and stakeholder communication. Rushing creates value destruction; patience creates value realization.
Market Positioning Through Focus
Kemira's competitive advantage: • Strong market share in water treatment in chosen geographic areas • Large operator offering delivery reliability · Targeting above-the-market revenue growth (market growth estimate 2023-2028, CAGR: ~2-3%): Kemira provides expertise and tailored combinations of chemicals for water intensive industries.
By concentrating resources on water treatment and pulp/paper chemicals, Kemira achieved scale advantages unavailable to diversified competitors. The company can justify R&D investments, maintain application expertise, and develop customer relationships that smaller players cannot match.
Geographic Focus with Local Presence
Kemira has 57 sites globally in 40 different countries. Kemira is an agile company – operating globally but always within close proximity to its customers. Kemira's core strengthts are the high quality of its products and the company's track record as a reliable partner.
Water treatment chemicals cannot be shipped efficiently over long distances—they're often dilute solutions that are expensive to transport. Local production enables competitive logistics and rapid customer response.
Megatrend Alignment
The Water Treatment Chemicals Market size is estimated at USD 40.51 billion in 2025, and is expected to reach USD 53.35 billion by 2030, at a CAGR of 5.66% during the forecast period (2025-2030). Growth is underpinned by intensifying water scarcity, stricter discharge norms, and the spread of zero-liquid-discharge requirements across heavy industries.
Kemira has positioned itself at the intersection of powerful secular trends: water scarcity, environmental regulation, and plastic replacement. These aren't cyclical factors—they're structural shifts that drive consistent demand growth.
Porter's 5 Forces & Hamilton's 7 Powers Analysis
Porter's Five Forces
Threat of New Entrants: LOW
Water treatment chemicals require significant capital investment, application expertise, regulatory knowledge, and local production facilities. New entrants face years of investment before reaching competitive scale. Customer relationships in municipal water treatment are particularly sticky—utilities prioritize reliability over cost.
Supplier Power: MODERATE
Key raw materials include caustic soda, sulfuric acid, and various polymers. Most inputs are commodities with multiple suppliers. However, energy costs significantly impact production economics, particularly for energy-intensive processes like chlor-alkali production.
Buyer Power: MODERATE TO LOW
Municipal water treatment customers operate essential infrastructure where chemical failure creates public health risks. They value reliability, technical support, and application expertise over price. Industrial customers in pulp and paper face similar dynamics—chemistry directly impacts product quality and production efficiency.
Threat of Substitutes: LOW
Alternative water treatment approaches exist (membrane filtration, UV treatment), but chemical treatment remains essential for most applications. No technology eliminates the need for coagulants, flocculants, and biocides. If anything, tightening regulations (PFAS removal, phosphorus limits) increase chemical treatment requirements.
Industry Rivalry: MODERATE
Ecolab, Kemira, Kurita Water Industries, Solenis and SUEZ are the major companies operating in this market. Competition exists but markets are often regional, and customer switching costs are meaningful. Price competition occurs but typically doesn't destroy industry economics.
Hamilton Helmer's 7 Powers
Scale Economies: PRESENT BUT LIMITED
Local production requirements limit global scale benefits. However, within regions, larger players achieve better logistics economics and can justify application engineering investments.
Network Effects: NOT PRESENT
Water treatment chemicals don't exhibit classic network effects—one customer's adoption doesn't increase value for other customers.
Counter-Positioning: PRESENT (HISTORICALLY)
Kemira's strategic pivot toward water chemistry represented counter-positioning against diversified chemical conglomerates. Focused players can invest more deeply in specific applications while conglomerates spread resources across many markets.
Switching Costs: MODERATE
Changing water treatment suppliers requires process adjustments, customer qualification, and risk of operational disruption. For critical applications (drinking water, pharmaceutical production), switching costs are substantial.
Branding: LIMITED
Water treatment chemicals are B2B products where technical performance matters more than brand perception. However, reliability reputation creates preference among risk-averse customers.
Cornered Resource: NOT PRESENT
Kemira doesn't control unique resources that competitors cannot access.
Process Power: EMERGING
Kemira's digital services (KemConnect platform) and application expertise create differentiation that competitors cannot easily replicate. The combination of chemistry knowledge, digital monitoring, and local technical support creates integrated offerings beyond basic chemical supply.
Ownership Transition: From State to Family Control
One of Kemira's most distinctive features is its ownership transition from Finnish state control to family ownership through Oras Invest.
By 2007, Oras Invest had become a household name in the HVAC and building material industries. The owners were ready to expand into a new industry. Kemira's main owner at the time, the Finnish state, was prepared to reduce its ownership sufficiently, allowing Oras Invest to become the largest owner.
In 2007, Oras Invest acquired a significant stake in Kemira and since 2008 it has been the largest shareholder in the company. Oras Invest Executive Chair of the Board Annika Paasikivi is the Chair of Kemira Board of Directors since 2025.
In 2024, Oras Invest holds 23% of Kemira's shares.
The Paasikivi family traces its industrial roots to 1945, when Erkki and Irja Paasikivi founded a small metal workshop in Rauma. The family built Oras into Finland's leading faucet manufacturer before diversifying into industrial ownership through Oras Invest.
In 2004, Oras Invest Oy was established to manage the industrial ownerships. From the outset, Oras Invest had a clear strategy: to become the largest owner of its publicly listed companies and a majority owner of its privately owned companies, based on long-term commitment.
During the financial period, Solidium sold all its shares in Mandatum Oyj for approximately EUR 131 million and divested its remaining shares in Kemira Oyj for approximately EUR 125 million. Solidium had been gradually reducing its stake in Kemira, as the company already had a strong Finnish anchor owner, Oras Invest.
The state exit was deliberate and gradual—first reducing to minority ownership in 2007, then incrementally divesting through 2024. The presence of Oras Invest as a committed industrial owner provided stability throughout this transition.
As a testament to our belief in our portfolio, in 2024 we further deployed EUR 177 million of capital into Valmet, Kemira and Georg Fischer. Oras Invest is represented on all three companies' Boards.", says President & CEO Annika Paasikivi. Oras Invest is the largest industrial owner of the listed companies Kemira, Valmet and Georg Fischer, and the 100% owner of Oras Group.
Financial Profile & Key Metrics
January-December 2024 performance, unadjusted for the Oil & Gas divestment: Revenue decreased by 13% to EUR 2,948.1 million (3,383.7) due to the divestment of Oil & Gas. Operative EBITDA decreased by 12% to EUR 585.4 million (666.7) due to the divestment of Oil & Gas. The operative EBITDA margin increased to 19.9% (19.7), driven by improvement in Industry & Water.
Profitability remained strong and the 2024 adjusted operative EBITDA margin was 20.0%, with good performance in both segments. Cash flow was solid during the year, leading to a record-strong balance sheet.
Operative EBITDA: Kemira's operative EBITDA is expected to be between EUR 540 and EUR 640 million in 2025. The water treatment market is expected to grow in all regions. Both the pulp and the packaging and hygiene markets are expected to start to recover.
The financial trajectory reflects successful portfolio transformation: margins have expanded as lower-margin businesses exited, while revenue declined temporarily due to divestitures. The long-term target of doubling water revenue from 2024 levels provides the growth framework.
Key Performance Indicators to Track
For investors following Kemira, three metrics deserve particular attention:
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Organic Revenue Growth in Water Solutions: This segment represents Kemira's strategic growth engine. Sustained above-market organic growth (target: >4%) would validate the water chemistry thesis.
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Operative EBITDA Margin: The 18-21% target range represents structural improvement from historical levels. Margin trends indicate pricing power, cost efficiency, and mix shift toward higher-value products.
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Revenue from Renewable and Sustainable Products: As the IFF joint venture scales and activated carbon grows, the proportion of revenue from clearly sustainable solutions measures strategic progress.
Bull Case & Bear Case
Bull Case
The bull case rests on three pillars: structural demand growth for water treatment, successful renewable polymers commercialization, and continued margin expansion.
Asia Pacific sets the pace both in scale and growth, underpinned by rapid industrialization and sizable public investment in treatment infrastructure. Demand also accelerates in high-purity applications for semiconductors and pharmaceuticals, where ultra-tight quality targets drive specialized chemical usage.
Water scarcity isn't a cyclical phenomenon—it's a structural reality affecting economies worldwide. Regulations are tightening, not loosening. PFAS removal requirements alone could drive meaningful demand for activated carbon and advanced treatment chemicals.
The IFF joint venture could create a genuinely differentiated product portfolio. "Since 2020, we've been collaborating with IFF using the DEB platform technology, which has allowed us to bring sustainable innovation to our key markets," said Antti Salminen, CEO, Kemira Oyj. "The new joint venture will build on this initial success, enabling us to scale up production and provide new performance-competitive alternatives to fossil-based products in key markets, including paper and board packaging, paper coatings, and water treatment, while continuing to develop opportunities across other growth markets."
If renewable polymers achieve performance parity with fossil-based alternatives at competitive costs, Kemira could capture share in markets that favor sustainable suppliers.
Bear Case
The bear case centers on execution risk, competitive intensity, and end-market concentration.
The pulp and paper industry faces long-term structural headwinds from digitalization. While packaging demand partially offsets graphic paper decline, Kemira derives roughly half its revenue from this segment. Extended weakness in pulp markets—as experienced in 2023-2024—directly impacts financial results.
Competition from global players like Ecolab, Solenis, and BASF creates pricing pressure in key markets. While Kemira has strong regional positions, global competitors bring broader resources and customer relationships.
The renewable polymers joint venture requires substantial capital investment (EUR 130 million) with production not starting until late 2027. Technology risk, execution risk, and market acceptance risk all exist.
Finally, Kemira's geographic concentration in Europe exposes the company to regional economic weakness and regulatory changes specific to European markets.
Conclusion: A Century of Transformation
Kemira's journey from state-owned fertilizer company to global water chemistry leader represents one of the most disciplined corporate transformations in Nordic industrial history. Three major divestitures—GrowHow, Tikkurila, and Oil & Gas—systematically pruned legacy businesses while acquisitions built leadership positions in water treatment and pulp/paper chemicals.
The company that celebrates its 105th anniversary in 2025 bears little resemblance to the sulfuric acid plant that opened in Lappeenranta in 1922. Yet continuity exists in the fundamental mission: providing essential chemistry to industries that cannot function without it.
Today's Kemira serves customers whose operations depend on water—municipalities purifying drinking water, wastewater plants preventing pollution, pulp mills producing the packaging that replaced plastic, and paper manufacturers optimizing production efficiency. These aren't discretionary purchases; they're operational necessities.
Water and renewable solutions are at the heart of Kemira. Water is expected to be the key contributor for revenue growth going forward and our new long-term ambition is to double the revenue in water.
The strategic clarity achieved through decades of portfolio transformation now positions Kemira to capitalize on structural growth in water treatment—driven by scarcity, regulation, and sustainability requirements that show no signs of abating.
From feeding Finnish farmers in the 1920s to treating global water supplies in the 2020s, Kemira has continuously reinvented itself to serve essential needs. That adaptability—combined with the strategic patience of its family ownership—may be the company's most durable competitive advantage.
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