Neste changes the chairman of the board

Measurable The chairman of the board of the troubled oil refining company Neste is being replaced, informed sources tell Helsingin Sanomat. According to them, the shareholders’ nomination committee has started the search for a new chairman.

“As the chairman of the appointment committee, I cannot take a position on the matter. The appointment committee is doing its job and we will inform you about the matter in January, says the head of the ownership steering department of the Prime Minister’s Office Maija Strandberg.

Current chairman, mountain councilor Matti Kähkönen has been a member of Neste’s board since 2017 and chairman since 2018. Kähkönen previously worked as CEO of the engineering company Metso in 2011–2017.

The chairman last spring’s actions caused widespread surprise because he remained silent about the company’s problems and significant changes. Neste’s share value has fallen by almost 50 percent this year to 16.5 euros.

At the end of April, Neste unexpectedly announced the CEO Matti Lehmus from departure. More than a week later, the director of the most important business group, i.e. renewable fuels Katja Wodjereck was fired.

Six days after this, Neste issued a profit warning, in which it estimated that the average sales margin of renewable products would be significantly weaker than expected this year.

Such big changes in a short period of time are exceptional. Despite that, the chairman of the board, Kähkönen, refused to comment on the state of the company.

Owner control department Chief Strandberg told in June that he is a little worried about Neste’s situation. In his opinion, transparency would be an advantage for the company. The Finnish state is Neste’s largest shareholder with its 44 percent ownership.

Appointed as Neste’s new CEO in the spring Heikki Malinen will start his position at the beginning of November. Malinen previously worked as the CEO of stainless steel manufacturer Outokumpu.

Changes in the company’s management and sometimes unclear communication to investors have caused confusion.

“The company’s communication to the market and investors has not always been successful in the last couple of years, which has caused confusion. I wouldn’t be surprised if, in addition to the board, there were also changes to the management team,” says one analyst, who remains anonymous.

Liquid the central problem is the deterioration of the profitability of renewable fuels. Their supply has grown rapidly, but demand has decreased, which has led to lower prices.

In addition, the commissioning of Neste’s new refinery in Singapore has stalled, and a fire raged in the American refinery less than a year ago. The rising cost of the raw materials bought by Neste has also put a strain on profitability.