To get ready for more competition in the renewable fuels market, Finland’s Neste (NESTE.HE) announced on Wednesday that it intends to save 50 million euros ($53 million) a year through actions that include the elimination of 400 positions worldwide.
Due to its early investments in renewable fuels from waste and residue, the refiner and biofuel producers have experienced tremendous growth in recent years. Transportation operators and businesses seek cleaner fuel options to reduce their emissions.
Neste said it will simplify its development portfolio and combine its renewable polymers and chemicals, renewable road transportation, and renewable aviation businesses into one.
Matti Lehmus, the chief executive of Neste, stated that the actions were necessary to guarantee the company’s competitiveness and future growth.
He told Reuters that his objective was to finish the changes by the upcoming European spring. “When we look at our operational environment, markets grow, but at the same time, competition is anticipated to increase,” he said.
According to Lehmus, the corporation will prioritize circular solutions and sustainable energy sources. However, he said, Neste’s quick expansion has resulted in many development projects and organizational complexity, which it will now reevaluate.
Neste announced that it would now reduce its development portfolio to realize further savings, most of which it expects to achieve by 2024. “Our strategic focus is on expanding our raw material base in the short and long term,” Lehmus stated.
According to the corporation, the reorganization was a practical step toward achieving the strategy unveiled in June, which called for producing “additional value” of more than 350 million euros by the end of 2026 instead of 2022.
Lehmus stated that cost reduction and increased productivity will generate 350 million euros in value creation.
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