"Ruckizucki" paper.

Top management at paper and supplier companies have a common need--a revitalization of the business of papermaking. Voith has launched an initiative called "Ruckizucki" (roo-key-zoo-key, which is our way to accelerate positive change and bring bright, young minds and new ideas to papermaking. The German word "Ruckizucki" literally means to speed up and, in our case, to shake up the status quo.

As in any mature industry, it's easy to become complacent. This applies equally to producers and suppliers. Over the past few years we have taken an in-depth look at ourselves as a supplier to the industry, and we are better for it. Our Ruckizucki campaign may be the smartest more we ever made. First, allow me to share my view of the industry's dynamics, which motivated our change.

PAPERLESS? NO WAY

The paperless office has been long discussed and predicted. Television and the Internet are competing with newspapers, periodicals and books. Demand for catalogs, phone books and many other paper mainstays could be reduced. Does this mean the paper industry is doomed? I don't think so. What I do think it says is that we must improve existing paper uses and develop new applications.

We can take pride in what we have accomplished during the last ten years. Just look at the explosion of color and power of imagery we have provided across a wide spectrum of paper grades. We don't have to look too far back to realize that the world once had no paper-based hygienic products. The Tetrapak invention brought safe milk to countries without refrigeration. Paper cell phones are proof that paper can even be a computer vehicle. We must now move to broaden these initiatives and respond more quickly to market needs.

This initiative should begin producer-by-producer and supplier-by-supplier. We need to draw upon ideas from young people from a wide range of disciplines. Our Ruckizucki program, launched four years ago, seeks out and trains young people and encourages them to provide fresh ideas on a broad level. We now have 52 graduates from Asia, Europe, and North and South America. They don't need degrees in paper technology, but they must be bright, bilingual and have an international pespective.

Kevin Pease recently completed Ruckizucki. He is now a press fabrics applications specialist for board and packaging in the United States. He has worked in various Voith facilities in America, Germany and Sweden, including our pilot paper plant in Heidenheim, Germany. He considers the experience similar to a hands-on degree in international business. In his words, "Understanding cultures and values is absolutely critical when making a business decision. The international training program has given me the opportunity to gain further insight into the global business scene."

Andreas Sauer, 32, has quickly progressed from a startup engineering post in Ravensberg, Germany, to an applications specialist in Tokyo, where he hopes to master Japanese in addition to enhancing his knowledge of papermaking. At 31, Ingo Schmid, fluent in three languages, has recently become global manager for marketing and communications at Voith Fabrics. These individuals, just to name a few, are enhancing our ability to serve customers.

In addition to our Ruckizucki program, we are encouraging all of our employees to recognize and develop their potential for innovation. Cross-pollination of our machinery and fabrics people has proven beneficial in the development of new products. These results begin with a paper producer's wish list and play themselves out in rewarding new ways.

The road to profitability begins with a revitalization of our industry. However, we caution against indiscriminate cost cutting because it can gravely affect the health of a company and undermine quality and R&D programs.

By renewing ourselves, expanding our thinking and embracing fresh ideas, the paper industry will be a model for others to emulate. S!

Hans Mueller is President and CEO of Voith Paper and Voith Fabrics, Heidenheim, Germany, business units of Voith AG. He will be a featured speaker on the President's Panel at the PIMA International Management Conference, to be held June 29-July 2, 2003, in New York City. A native of Switzerland, Mueller began his career in the paper industry in 1962 at Consolidated Bathurst Ltd. in Canada and has worked in the paper machinery industry since 1971. He is a member of the corporate board of management of Voith AG and is responsible for the Group Divisions Voith Paper and Voith Fabrics.