Smart hydraulics Hydroline

Component manufacturing facilities Finished products ready for packaging

SMART HYDRAULICS

Expansion, acquisition, new services and ‘smart hydraulics’ are all on the agenda for Finland’s Hydroline Oy. Felicity Landon reports.

Hydroline takes the long-term view. For more than 50 years, this family-owned company has specialised in the development and manufacture of specialist hydraulic cylinders. Today it is the biggest company in hydraulics in Finland; its market share in Europe is constantly growing and Hydroline is an increasingly well-known brand. The company that began as a one-man operation in the basement of a house now employs 220 people worldwide, and dramatic expansion is planned for the next few years. Its customers include some of the world’s best-known brands, including Sandvik Mining & Construction, Cargotec, John Deere Forestry and Rocla.

Hydroline’s headquarters and main 12,000 sq m production site are at Kuopio in centraleastern Finland. This year (2014), the company opened a new production plant at Stargard Szczecinski, in north-western Poland; a greenfield development, it was, as CEO Mikko

Finished products at drying room

Laakkonen says, “started from zero by our people, and finished by our people.” The 4000 sq m Polish plant is a vital part of Hydroline’s ambitious plans for geographical expansion.

“We have plans for production in Asia and the Americas in 2015-2020,” says Mr Laakkonen. “From Finland, our direct exports are currently around 30 per cent and we expect exports to grow. Having said that, we are serving a very strong high-end manufacturing industry in Finland which has been vital for our growth, so we will continue to serve that as a priority.

“However, we look forward to having growth from other markets as well. We are really close to the Russian market, which is very interesting for us – we have done a lot of market research and it looks really promising. We can serve the Russian market from Finland, or we might consider a production site inside Russia.”

Hydroline is at present mainly active in central Europe, but the aim is to grow worldwide, says Jani Lehikoinen, vice-president, business development & marketing. “In Asia, the demand for high-end products is growing rapidly. Also, South America and South Africa are very interesting for us.” New market sectors

At present, 96 per cent of Hydroline’s sales are to the mobile machinery sector – including various types of construction and forestry machinery, load handling equipment and other machines moving on wheels, chains or tracks. “Our market share is growing fastest in the load handling segment. The demand for forestry equipment is also growing quite well,” says Mr Lehikoinen. “As for new markets for Hydroline, the energy segment is definitely growing the fastest, including wave and wind energy.

“Overall, we are expanding our segmentation to marine & offshore, energy and industrial solutions, in addition to our strong mobile segment.”

The company recently set up a subsidiary, Hydroline Energy Oy, reflecting its plans for this sector. “Definitely we can apply the knowledge we have and the technology we have in these new segments,” says Mr Laakkonen. “The technology used in the energy segment is not so different from that in mobile machinery. Of course, marine & offshore operations require certain certifications and you need to ensure you are up to speed with these. Our more than 50 years of experience ensures that we already have the required knowledge to go into these markets.”

Hydroline commits at least 4 per cent of its turnover to development work, and key focus areas are preventive maintenance, industrial internet, intelligent hydraulics, common rail and digital hydraulics.

“At the moment, the majority of our offering is hydraulic cylinders and piston accumulators,” says Mr Lehikoinen. “We are focusing on high-end hydraulic products for demanding applications. In the future we will also move to the control systems and bigger hydraulic systems. Our service business will then support the expansion of our product portfolio.”

Smart hydraulics

Smart hydraulics is the main driver of future products, he says. “That is quite a broad topic. In our case, it means utilising the industrial internet and creating more and more intelligence inside the product. We are focused on preventative maintenance, and another main driver is that we want to make a safer work environment and help our customers to build more and more energy-efficient machines.”

Cylinder in boom application

Information acquisition is the key, he says. “We are looking to extract more and more information from the different machines, so the end users can make their work more efficient. We already have a good supplier base and network for this and a strong R&D team as well. But, as we seek continuous improvement, we will be hiring and training new professionals. Incidentally, ‘smart’ also means the way in which we produce our solutions and the way we deliver our goods to the customers – basically, we are looking at intelligent components and also intelligent ways of producing them. It is a whole big picture. We have to be smart in everything we do – in R&D, production and delivery.”

As part of this push for smarter solutions, he hints that mergers and acquisitions could be on the way. Hydroline is owned by the Laakkonen family, with investment company Etera holding a 19 per cent share. “We have a long-term approach to developing our business,” says Mr Lehikoinen. “We really appreciate our personnel and consider them as part of the family. Our management and owners are easy to reach. Our customers respect the commitment throughout the organisation. We are more flexible and more committed to our work compared to our competitors.”

Headquarters in Finland

Close to customers

But geographic expansion is inevitable. “A key issue is logistics and customer demand. The lead time from order to delivery has to be shorter all the time. This also means we need to have locations all around the world close to the customers and the market, so we can be as quick as possible. So definitely we want to be in Asia and the Americas, and maybe inside the Russian market too.

“There are three ways to grow: organic growth, new customers and segments, and mergers and acquisitions. Most of the growth will come from new customers and mergers and acquisitions – although we have experienced rapid growth from our traditional customers as well.

“It is a little bit too early to give details of our plans in Asia and the Americas, but we are using all the available tools to expand our activity internationally. Mergers and acquisitions, joint ventures – these kinds of things we are considering all the time.”

Hydroline has not only survived the global recession but has grown in the past few years. Budgeted growth for the current financial year is nearly 20 per cent. “Not many companies in our industry have managed to survive these past few difficult years,” says Mr Laakkonen. “But we have made good decisions and, what is most important, we have a very good team of different kinds of experts. That has helped our company to grow despite the market situation.

“The upcoming years will be really interesting – there is a lot happening, we are growing fast and we are very ambitious about our development.” n