Värmland and the Paper Province

Bioeconomy in the region

Some 200 companies dedicated to the pulp and paper industry are the result of a long history of forest exploitation in Värmland. These include forest companies and sawmills, which provide jobs to some 12,000 employees. Many of these are small and medium-sized companies, but the region also hosts global giants that play an important role in the development of technologies used worldwide. The decline of the paper and pulp industries, followed by severe structural challenges in Värmland during the 1990s, motivated Karlstad Municipality and other regional actors, both public and private, to join forces and establish “The Paper Province” cluster organization. The Paper Province was later reorganised into an economic association, which today has more than 100 member companies.

The Paper Province

The Paper Province is a unique business cluster of forest-industry companies as it connects all parts of the forest value chain with university, public organisations and civil society in a search for new bio-based solutions, thereby creating a platform for gathering stakeholders. Among its members are various world leaders in packaging material and packaging solutions, specialty paper, cardboard, paper and pulp and tissue machines, coating machines, and barriers (e.g. Stora Enso, Valmet Paper, SOMAS, and BTG). There are also a large number of SMEs, which provide the sector’s largest share of employment and turnover, and provide key competencies. Värmland has effectively moved from orthodox pulp and paper operations into adopting a bioeconomy approach, with the aim of becoming a global leader of the forest-based bioeconomy and an example of best practice. Despite the worldwide decline of paper production, Paper Province companies have had a growth rate three times higher and 6.8% higher profitability than the Swedish average over the last six years.

Policy support for the bioeconomy

The Paper Province initiative has been established and financed in a triple-helix arrangement. Besides private companies, various other partners from the public sector, research, and civil society have supported the initiative. These include universities (mainly Karlstad University) and public actors, i.e. municipalities: Region Värmland, VINNOVA, and the Swedish Agency for Economic and Regional Growth (Tillväxtverket). VINNOVA, the Swedish Governmental Agency for Innovation Systems finances 50% of Paper Province activities while the remaining 50% is co-financed by all the other public and private partners. Although the Paper Province member companies compete with each other, their cooperation is an added value, which allows for the development of the bioeconomy in the region (by concentrating knowledge and expertise and allowing regional growth) to benefit all.

Regional dimension

From a regional development perspective, the success of the development of the bioeconomy in Värmland, despite the global decline of paper and pulp industries, can be explained by:

1. The effective mobilization of critical mass from several sectors and improved expertise (of the Paper Province cluster organization and the Värmland region);
2. More systematic assistance from Karlstad University and increased cooperation between researchers and industry;
3. The close collaboration among actors, even competitors; 
4. The presence of effective institutions and an institutional setting that facilitated and cofunded the process through innovation systems and funding programs. These positive conditions for regional development are expected to be reinforced, as the Paper Province will use VINNVÄXT funds to support research, and the development and commercialisation of new forest-based products and services over the coming years.

Learn more…

• The Paper Province