When Sohrab Kazemahvazi started working for Ahlstrom three years ago, the world seemed like a very different place. However, within a short window of time, incidents in geopolitics and macroeconomics have led to imbalance in the established world order. 

– In order to mitigate risks, many politicians and heads of businesses want now to secure their operating environment. With a company operating on an international stage, you have had to balance somewhere between local presence and global activity, Kazemahvazi says. 

Just before summer Kazemahvazi transferred to take over Ahlstrom’s glass fibre tissue production as former Vice President, Pekka Helynranta, retired. Besides the development of the Karhula plant in southern Finland, Kazemahvazi sees growth of glass fibre tissue business in the US as his main task. 

– We were perhaps quite fortunate in a sense that we had built a plant in the US a couple of years ago. In light of the tariffs, that proved quite remarkable. Although they were not uppermost in mind when the decision for this investment was made. 

The new factory offers security and stability both for Ahlstrom as well as clients who already had concerns regarding a possible trade war and were asking about deliveries. There are also other benefits with having a local plant. 

– Delivery distances are short giving us the possibility to make quick decisions. This provides the needed operational flexibility because we can deliver material either from Karhula or from the US. 

From rule-based order to selective compliance 

The entire post–Cold War period has been an era of globalisation and rule-based approach. This was when cross-border trade was liberalised. Globalisation was not considered a dirty word but, rather, a concept that was equally beneficial for all parties.

For Finnish companies the post-Cold War era has been favourable. The opening of world trade has provided unique growth opportunities for our small nation and companies, says Hiski Haukkala, Director of the Finnish Institute of International Affairs. 

As the world is increasingly shifting from globalisation to protectionism, the traditional assumptions regarding rule-based free trade have been called into question. 

– A transition from a rule-based approach to a selective compliance with rules is now taking place. 

Seems like power politics and use of force, both in military and economic terms, are setting in, Haukkala says. 

This development is driven by varied reasons, but Haukkala especially highlights the changes in positions of power in world politics. At present, US does not see the system being beneficial enough and, thus, it is withdrawing. This gives way to China to emerge as a global power. 

– This creates a new global playing field for politics and competition. Operators can start afresh and assess what would be the sensible way of proceeding in world economy and trade policy. 

Turbulence is increasing 

There is always unrest in breaking points, and when major powers are trying to find their place midst the global power shift, there is always competition as well as conflicts. 

Haukkala points out that there are also other shifts currently taking place. They, too, add to the turbulence. The technological revolution creates dynamics of change impacting also the relationships between great powers. 

– Let’s not forget about the climate change and the broader sustainability crisis. Both affect the situation as a whole, Haukkala ponders. 

Ahlstrom also has experience with growing volatility especially in logistics. When Houthi rebels disrupted international shipping in the Red Sea, Ahlstrom’s containers had to be rerouted to travel around Africa’s southernmost cape. Severe drought in Panama Canal led to the use of the waterway being halted. A cargo ship got wedged sideways in the Suez Canal blocking all cargo shipping headed for Europe a few years ago. 

– We can be sure that volatility in the markets is continuous, Kazemahvazi says. 

– As a manager, it’s now essential to ensure our ability to react quickly in our business operations and make decisions flexibly. 

This, in the short run, means swift problem-solving with costs perhaps slightly higher than planned, and delivery times that are longer. 

In the long run, disturbances and deviations raise a question as to what would be the best way for a company to deal with certain situations. 

– The smart thing would be including the famous Plan B in the strategy in case the worst happens. 

Those prepared for uncertainty, survive 

Companies should be preparing, at least on a mental level, that uncertainty is increasing. 

According to Haukkala, this is indicative considering many geopolitical tensions and conflicts that have followed. 

– The idea that all operations could be built on the JIT philosophy – Just in Time – is no longer justified. It could be helpful, for example, for a company to consider alternative channels for the commodities they need, and find alternative markets to gear towards, if significant problems appear elsewhere, Haukkala says. 

Kazemahvazi brings up the flexibility of a business operation as the best way to prepare for the growing volatility. This is what Ahlstrom’s plant brings into the glass fibre tissue production. 

– When you manage to compile a product portfolio with flexible delivery methods, you don’t get stuck in some specific position. With us, it’s the factory in Karhula that can cover for the new one, and vice versa.  

Acute crises, such as logistics problems, are not bad in every aspect, though. They offer a great way of measuring how an organisation manages its activities in exceptional circumstances. 

They teach you efficiently how to act during crises. 

– In terms of success, it’s important to have the readiness in the organisation and the team to face instability. This is our starting point from which we will begin to build the operations of our new plant.