Close collaboration decisive after major fire

How do you rebuild a business when the unthinkable happens? The forestry group Holmen and If had to display both strong collaborative skills and ingenuity when a fire had ravaged one of the group’s paper mills.

One of the bigges ever claims

What would prove to be one of If's biggest ever claims in recent years began on a perfectly normal Friday afternoon in November 2015. Just after 6 pm the emergency services received the alarm – a fire had started in the Hallsta paper mill to the north of Norrtälje. It spread quickly, and although the emergency services managed to put out the fire in one and a half hours, the damage was extensive.

Victoria Thomasfolk at If's property damage department had just returned from a trip abroad and was at home on the sofa when she heard the news. She phoned her contact at the forestry group Holmen to see if they needed help.

"I travelled there on the Saturday morning to see what the situation was on site. We realised very soon that this was a really major claim, although the true extent that later emerged was something we couldn't imagine on that first weekend," she says.

The fire started in refiners

The fire had started in one of the plant's refiners. It was then able to spread via ducts and cable trays to other parts of the four-storey building. Neither of the two paper machines were damaged, but cables and a lot of electronic equipment in the building were damaged. Most of them were never reached by the flames but were damaged by the heat, which reached temperatures of several hundred degrees while the fire raged.

The effect was that all production had to be shut down. "We manufacture our own pulp for paper and can't buy the same product on the market – so we're dependent on the factory operating. We usually count our shutdowns in terms of minutes, but in this case it took almost 100 days before we were back in full production again," says Johan Abrahamsson, Acting Site Manager at the Hallsta paper mill.

"When I arrived a couple of days after the fire, all the electronics in the building were knocked out, everything was black and sooty. Cables were hanging over the place, it was cold as the heating system wasn't working and everything was soaking wet from the extinguishing water. It looked really bad," recalls Magnus Johansson, claims adjuster and part of If's team during the process of settling the claim.

Photo: Holmen/Lasse Hejdenberg: At least 400 external people were working together with Holmen's employees to restore the plant after the fire.

Large claim team

The initial period following a major incident is always absolutely decisive, and this was no exception. It was a case of quickly creating a structure in the organisation, obtaining resources and managing both internal and external communication. Before decontamination work could begin, consultants had to be brought in to make sure that the building was actually safe to work in.

"We had several meetings during that first weekend, and after only two days Holmen had much of this in place, which was incredibly impressive and professional," says Victoria Thomasfolk.

The next stage for If was to assemble their own large claim team to deal with the assignment. Joining Victoria Thomasfolk, who took the role of Chair and was responsible for machines, and Mag-nus Johansson with responsibility for the building, sanitation and ventilation, was Maria Holst, who took care of settling the claim relating to business interruption insurance. In order to make sure that the terms and conditions were interpreted correctly and to learn lessons for the future, the team was also augmented by underwriter Joakim Troive and risk engineer Stefan Nyberg. 

They were to spend a lot of time at the mill, and the phrase "Tuesdays at Hallsta" was soon coined. The fact that the whole team was on site at the factory at least once a week proved to bring many benefits. "It's natural for us to be involved. It'sextre mely important that we can take up discussions on an ongoing basis and be in agreement with the customer at all times about what’s covered by the insurance policy – that’s much easier if you can be on site,” says Maria Holst.

The task of getting production up and running once more required a lot of external labour. In total there were at least 400 people with expertise in various fields on site at different times in order to restore the plant – including several decontamination companies and firms of electricians, together with mechanics, scaffolders and many others.

Hotels, conference facilities and hostels in the vicinity quickly filled up – Holmen estimated that 4,000 hotel nights were used before the work was finished. But the regular workforce at Hallsta also contributed tremendous efforts during the restoration process.

“Our employees have put in heroic performances. Everyone’s understood the gravity of the situation and stepped up to the plate to a degree you can’t normally ask for – they have been amazing,” says Mill Manager Johan Abrahamsson.

Had to wear masks

More than 300 kilometres of cables were laid during reconstruction work, to replace those damaged by the fire. But this was just one of several kinds of material that had to be obtained in large quantities. "Initially everyone had to wear heavy duty protective masks just to be on the premises. 

When the PVC in the electrical cables burned and mixed with the extinguishing water, hydrochloric acid was generated and this not only attacked metal, it communicawas also dangerous to inhale. I believe that Holmen emptied Sweden of those masks, so that there were enough for everyone who was working,” says Victoria Thomasfolk.

As the heat from the fie affected the whole building, it was a major challenge to assess which equipment needed replacing and which could still be used.  “There were thousands of machine parts and electrical components that could potentially have been damaged by the fie. If we’d examined each and every one of them, it would have taken an unreasonably long time. We were forced to find a better way,” says Victoria Thomasfolk.

One part of the solution was a heat map – a tool developed by consultants that showed how high the temperatures had been in different parts of the building while the fire was in progress. By comparing the map with information about the temperatures that various components can withstand, it could be deduced which equipment had been destroyed – after this there were random samples.

Photo: Holmen/Lasse Hejdenberg: A lot of electronic equipment was destroyed, and more than 300 km of cables were laid inside the plant during the reconstruction.

Coordination, coordination, coordination

Coordinating the work on site could have been a challenge. While the decontamination workers had to battle with soot and deposits on walls and machines, the electricians and Holmen’s employees wanted to draw electricity cables and repair machines so that production could restart as soon as possible. The solution was to divide up the work – decontamination with water and chemicals took place at night time in order to avoid clashes and conflicts.

To apply a systematic approach to the work and be able to keep track of what had been done and what remained, the premises were divided into a grid with named sectors, which made it possible to monitor which parts of the building had been decontaminated and which still had to be worked on.

Photo: Holmen/Lasse Hejdenberg: One of the two paper machines was up and running after 12 days - full production at Hallsta was reached after 99 days when both of them could be started.

In March 2016, 99 days after the fire, both of the factory’s paper machines were back in production, and in October the same year If completed its settlement of the claim. Instead of two or three years, which is usual in connection with major fires, settlement only took ten months.

Good communication and short decision-making paths

The fact that If works with its own personnel on claims is one factor behind the work being able to proceed so quickly. Doing it this way instead of bring ing in external claim handlers, which is otherwise usual in the industry, creates shorter decision-making paths and a simpler prioritisation of resources. It also brings If closer to the customer, which is usually very much appreciated.

But that's not the only explanation. "The fact that it went so quickly was also because Holmen was proactive and had good procedures for the work. A process such as this takes a lot of energy and we agreed with them not to let it drag on in terms of time," says Maria Holst.

If handles a lot of major industrial claims every year, but the fire at Hallsta turned out to be one of the biggest in recent years. According to Magnus Johansson, there were several lessons to be learned from it. 

"An understanding of the customer's manufacturing process is important for a good claim settlement process, but it's also very much about good communication with both the customer and others involved in the claim. Building a relationship is incredibly important. You're making thousands of small decisions all the time, and the most important thing is that they can feel confident in us and we in them," he says.

At Hallsta, Johan Abrahamsson can look back on an incident that despite everything has made the business stronger. "Of course the fire was a major challenge for us, but we achieved a good settlement in partnership with If and I believe we came through it all with flying colours," he says.

Article by
Tobias Edlund

Tobias Edlund

Communications, If