Finland's Neste has unveiled plans to save a substantial 50 million euros (approximately $53 million) annually. These measures include a global workforce reduction of 400 employees. The company, a prominent refiner and biofuels producer, has witnessed rapid expansion in recent years due to its early investments in sustainable fuels derived from waste and residue. Industries and transportation providers, in their quest for eco-friendly fuel alternatives to reduce emissions, have increasingly turned to Neste for solutions.
To streamline operations and ensure future growth and competitiveness, Neste has decided to merge its Renewable Aviation, Renewable Road Transportation, and Renewable Polymers and Chemicals divisions into a singular entity. Furthermore, the company will rationalize its development portfolio, acknowledging the need for these changes as essential.
Neste's CEO, Matti Lehmus, emphasized the inevitability of these measures given the evolving market dynamics. “When we look at our operational environment, markets grow but at the same time also competition is anticipated to increase,” he told Reuters, adding that the goal is to complete these adjustments by the upcoming European spring.
Lehmus affirmed that Neste's overarching strategy, focusing on renewables and circular solutions, will remain unchanged. However, the rapid growth experienced by the company has led to organizational complexities and a multitude of ongoing development projects that require reassessment.
Neste's restructuring efforts aim to generate additional savings, primarily in 2024. The company's strategic priority is to expand its raw material base, with a focus on both the short and long term. This restructuring is part of a broader plan presented in June, with the aim of creating over 350 million euros in “additional value” by the end of 2026 compared to the baseline in 2022.
Lehmus detailed that this 350-million-euro value creation would be achieved through enhanced productivity and cost-cutting measures, representing a strategic move to position Neste as a leader in the competitive renewable fuels landscape.
