Business Finland 5/2011 by Perhemediat Oy

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Stockmann in Russia with the Force of Seven Stores

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EDITORIAL Motivating personnel, building the brand

ossibly the best known Finnish brands in Russia are Nokia and Valio with its cheese. As this publication shows, there are also many others. The coffeemaker Paulig and department store Stockmann have been in Russia for roughly 20 years. This year Paulig opened a coffee roastery in Tver and Stockmann’s new department store started in Yekaterinburg in March. This means that Finnish companies more and more operate also outside of Moscow and St. Petersburg, and Finnish brands become more familiar also in “provinces”.

Jorma Leppäniemi

However, often it is not even important to know that this or Editor-in-Chief that company comes from Finland. The brand and operational excellence in most cases is not linked to nationality but to business culture and ability to motivate people inside the company. And the best brands adapt to local conditions. Paulig roasts darker coffee in Russia than in Finland, and Stockmann keeps doors open late in the evening in Russia, since Russians like late shopping. In some cases surprisingly small companies can create strong brands, especially in the hospitability business – spas, restaurants, hotels, theme parks, etc.. One good example is the Hotel Haikko Manor in Porvoo, 50 km from Helsinki. It started as a family-run business in the 1960s, and continues to be so in the second generation. Haikko has many Russian guests. It is possibly because of the romantic atmosphere of the manor hotel, or its link to the Romanov dynasty, or excellent side services like premium French wines, fishing, sauna, golf – or all of these. Haikko is by no means very small – 100 000 people visit the venue every year – but compared to big hotel chains it remains small. For them, being small is an advantage. Owners and managers of Haikko have been able to motivate their personnel by forming a strong community. This could be seen and felt even during our short visit to Porvoo. Naturally large chains can also be innovative in services as the Holiday Club concept proves. Holiday Club is the leading timeshare company in Europe and the leading leisure-time housing and spa services provider in the Nordic countries. The company has 31 destinations in Finland, Sweden and Spain. You can enjoy the same service standards everywhere. Last but not the least, there are many expert companies in goods and services between Finland and Russia. They are not usually visible, and do not even need that much publicity. Take a look at these companies which handle legal issues (Consu Oy), market studies and advice services (Markinvest) constructive and architectural planning (OOO Sormunen & Timonen), and multi-cultural education (CBU Cross-Border University). We wish you all good for the last months of 2011 and even better for the year 2012!

Jorma Leppäniemi

5/ 2011

EDITOR-IN-CHIEF Jorma Leppäniemi EDITORS Klaus Susiluoto Quingbo Xu Sini Pennanen Juha Jyrkäs Jarkko Repo

LANGUAGE EDITOR Nordic International Ltd

DESIGN AND LAYOUT Aivo Blum Jarmo Koivisto MARKETING Jorma Leppäniemi Tel. +358 9 42821012 PUBLISHER Kustannusosakeyhtiö Perhemediat Oy Purpuripolku 6, 00420 Helsinki Tel. +358 9 42821000 Fax. +358 9 42821030

contents

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Russia in the 2010 – Global Sports Events, Improved Trade Opportunities Finnish-Russian Chamber of Commerce - Recommended by 98 percent of the Customers Stockmann in Russia – with the Force of Seven Stores PAULIG For the Friends of Real Coffee Milk Know-How from Finland Designing constructions in Russia Consulting for Russian markets How do you define innovation? From Finland into Russia with love Money for nothing and portfolio managers for free Pohjolan Voima - aims at more than 90 % CO2 free energy Light and air from Keraplast Romanticism of Haikko Manor Appeals to Russians Finnish resort just next to Russia - Holiday Club Saimaa The future of Pyhäsalmi Vivago - Exporting wellbeing CBU Aviapolis – International Innovation Hub Sixt Finland - - Committed to Customer Service Strong Competitiveness with Vantaa’s Strategy LAK - Helping to Build Varied Airport City Modern Scandinavian Style Airport Hotel The New Look of Blue1 ScanWings – Almost There Sokos Hotel Flamingo Lapponia Lakka Cloudberry Liqueur

Russia in the 2010

â&#x20AC;&#x201C; Global Sports Events, Improved Trade Opportunities Vladivostok

Text: Klaus Susiluoto

Business Finland 5/2011

business & administration

I personally have regarded it important to maintain and develop good relations to different Russian provinces – all the way to Russian Far East.

In the 2010s there will be few countries in the world as interesting as Russia. Finland is in the forefront in observing what is going on in Russian business. Finnish Ambassador in Moscow, Mr. Matti Anttonen, is rather optimistic, but by no means uncritical.

MBASSADOR ANTTONEN tells that the Foreign Ministry has an important role in promoting Finnish exports in Russia. “Different promotion organizations like the Finnish-Russian Chamber of Commerce are our partners. We have export promotion delegations where people from the embassy, and in some cases ministries are involved. In Russia political leaders have quite strong influence also on economic issues. It is important to establish relations with local and regional officials and politicians, and in larger projects also with the central administration.” Finnish embassy also supports marketing efforts of companies by distributing information of the development of Russian economy. According to Anttonen, one big change is that everything really does not go through Moscow any more. “Finns have been active in Russian regions. I personally have regarded it important to maintain and develop good relations to different Russian provinces – all the way to Russian Far East. Russia has more than ten cities with about one million or more inhab-

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business & administration 6

itants. Many of these are in areas close to natural riches. “It is no wonder that many Finnish companies have a strong presence in many regions with strong economic dynamics. For example, Yekaterinburg and Urals are strong in heavy industry. Kaluga and Kazan have well-developed industry as well. Rostov-on-Don and Krasnodar are known for their varied agriculture. West Siberia is an area of gas and oil industry. “The city of Vladivostok in Russian Far East is an interesting industrial and logistics city, and we arranged Finland-RussiaJapan business promotion and contact trip there in October. St. Petersburg is the closest Russian region from Finnish perspective, a major industrial center and extremely attractive tourist destination. The wealthy Moscow region has opportunities in every branch from logistics and industry to retail and information technology.”

Business Finland 5/2011

Services Exports

Various Developments

Ambassador Anttonen says that it is important to notice that exports to Russia can also be services. “For many years, Russia has had a role in services. An estimated 5 percent of all immaterial exports are directed to Russia. The amount in 2010 was almost worth of one billion euros. There was a slight decline, but many new opportunities still exist. For example, the computer game and animation figures ‘Angry Birds’ have been popular also in Russia. A prominent Russian economic review visited Finland to make a feature article on the company (Rovio) that is behind the bird figures.” So far, services exports have mainly been engineering and consultancy. “Certainly there is a need for new technology and new business approaches in Russia. When it comes to the development of production facilities inside Russia, it is up to the owner’s decisions how to achieve results and maintain and develop technology.”

In Anttonen’s view, large energy and raw material companies have large investment programs and ability for financing. “However, after the recession, the SMEs have been in much more difficult situation. It is expected that in larger scale investments will intensify after the result of presidential elections is known.” The economic downturn of 2008-2009 brought some turbulence to Russian industry. “This resulted in some support and subsidies measures, some of which were protectionist in nature. These measures, part of which might distort competition, will be handled as part of Russia’s WTO membership negotiations. Also the amount of subsidies of agricultural products will be agreed upon.” After becoming a member of WTO, Russia will have equal rights and obligations. “This means that predictability and transparence of Russian market will be

business & administration

increased. Russia thus will emerge as a more interesting investment target,” believes Anttonen. In the last decade, much has happened in automotive industry. “Foreign car manufacturers are well-established in Russia, and there are a couple of regional automotive clusters – not only assembling – in Russia. For example, St Petersburg has quite much automotive industry. Most of the cars are imported. Passenger cars are newer and newer. The government’s incentive to breaking-up of older cars has functioned well.” In the last ten years, telecommunication has developed from scratch. It is now a strong and competitive branch of business. Software business is strongly developing.

Tourism Flourishes in St. Petersburg High-speed train connections between Russian cities have increased, and airport shuttle trains in Moscow ensure smooth commuting between international airports and Moscow city centre. “Finland benefits from high-speed train connection between Helsinki and St. Petersburg. The amount of passengers has increased tens of percent after the new 3.5 hour service,” says Anttonen. Food and drink industry in Russia have many domestic success stories. Traditional retail and e-commerce develop in a dynamic way, as do restaurant business. Visa-free cruises (max 72 hours) have boosted cruising to St. Petersburg.

“However, some obstacles in getting longer visas, some register decrees on B & B accommodation and lacks in tourism infrastructure hinder more active traveling to Russia – yet there are really fascinating travel destinations in Russia, with great architecture and areas of nature’s beauty. In my view, to improve infrastructure is really the number one priority in Russia. It seems that St. Petersburg has been most active in this task so far,” says Anttonen. On the other hand, many Russians come to Finland for a holiday or take a ferry trip. Russians appreciate safety, clean nature and an option to have a family holiday in a rented summer house. Several hundred Russians have also bought summer houses in Finland.

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“Measured in quality of travel services, Finns naturally compete with others. Russians expect the best available service.”

Focus on Energy-Efﬁciency Ambassador Anttonen believes that In order to make a breakthrough in Russia you need to know Russian culture and lifestyle. “It might sound a phrase, but in Russia commerce is made between people. Respect between them is a cornerstone in all commerce.” However, in spite of several success stories, it remains true that Russia has invested too little in infrastructure in the past decades. Corruption still exists. In public projects, getting schedules work better and directing funds to projects in a right way have been priorities. Threeyear budgeting and separate funds are some examples of new thinking in infra projects like building roads. To improve energy-efficiency and other features of apartments is a burning issue. “It seems that in public projects domestic companies have been favoured, but certainly special know-how is needed from abroad. In the coming years these kinds of projects will inevitably increase. Finland has traditionally been strong in delivering investment goods. We will have to follow what is going on in our neighboring country. “When setting up business operations in Russia, it is true that productivity and personnel concept is different from the Finnish one. For example, more workforce is generally needed in Russia in a company of similar size, no matter what kind of company it is.”

Business Finland 5/2011

Winter Olympic Games 2014

Sports in Your Heart The Football World Cup 2018 will be arranged in Russia. Winter Olympic Games will also be held in Russia, in 2014 in Sochi. “These give an enormous boost for Russian infra projects,” believes Anttonen. “Traffic connections between cities, stadiums and accommodation will have to meet the requirements of FIFA. And it is a matter of pride for Russia to do things right in this issue.” The Finnish-Russian Chamber of Commerce has started a coordinating work on finding contacts for Finnish companies. This certainly is worth con-

sidering for many export companies. “As far as we know, some Finnish and other foreign companies have been able to make agreements there, but mostly it is in Russian hands.”

Customs Work Improved An Achilles heel in Russian trade has been uneven customs work. Troubles, delays and hindrances in customs work have too often obstructed business. In the last a few years there has been progress. “Finland hopes that electronic customs procedures could be more effective. Input is needed from the EU and Russia as well.

business & administration

Football World Cup 2018 “According to their own development project, customs clearance in some cases is shifted from St. Petersburg and Moscow regions to the place closer to the borders. This has meant decreasing clearing capacity in Russia’s two main cities from time to time. “In the past even 5-6 different officials representing different administrations were involved in customs formalities – from the last summer the number of officials has decreased to two. Russia, Kazakhstan and Belarus have formed a customs zone. It is worth studying the effects of this union if your company also exports/imports to these countries.”

Seeking Information Ambassador Anttonen believes that Russian companies will be more and more active in Western market. “At the moment they want to gain ground in the home market. Many Russian companies have only a vague insight of what globalization has brought along.

The Chamber of Commerce of Finland has published a booklet in Russian on how to set a company in Finland.” The Invest in Finland organization gives advice for all foreign investors. Finnish-Russian Chamber of Commerce operates also in Russia and offer guidance. “For those interested in information technology, an innovation centre ‘Innode’ could be useful. They are based in St. Petersburg and Moscow. “Under the Talouskomissio (Economic Commission) there are ten regional working groups that give information on Russians who are interested in doing business in Finland. Finnish Embassy in Russia works closely with Finnish promotion organizations and is willing to give advice even in small issues.”

From the Soviet Union to Russia

Soviet Union –in 1980 for the first time. In Moscow I worked for the first time in 1987. After that I have mainly worked on Russian-Finnish relations. “I have been very satisfied with the career I chose. Russia is and will remain our foremost partner and a good neighbor. The best thing about Russia is its people. I share with them love for nature with large forests, rivers and lakes. I feel home in forests, and pick up mushrooms and berries as many Russians and Finns do.” It has been interesting to see the quick change after the collapse of Soviet Union. “Service sector has developed exceptionally well after the Soviet times,” says Mr Anttonen. “Finland is not so well-known as German or France, but reliability is a competitive issue for Finns, and Finnish quality is appreciated in Russia. www.finland.org.ru

Russia has been a kind destiny to Mr. Matti Anttonen. “I visited Russia – at that time the

Business Finland 5/2011

Finnish-Russian Chamber of Commerce - Recommended by 98 percent of the Customers

Text: Klaus Susiluoto

It is about quality and reliability of Finnish brands. Russians are ready to pay a little more for quality productsâ&#x20AC;Śâ&#x20AC;?

business & administration

Business in Russia today is made in a modern way when it comes to the introduction and use of information technology and other tools, says Mirja Tiri, the Managing Director of Finnish-Russian Chamber of Commerce.

HE ASSOCIATION of FinnishRussian Chamber of Commerce (FRCC) was founded in 1946. It is a non-profit organization whose mission is to promote companies’ business and competitiveness as well as economic relations in Russia and Finland. The FRCC’s vision is to be a pioneer organisation in its field. “Our approach cannot be compared with other chambers of commerce. Our mission is to promote internationalisation of business in Russia, through concrete means like offering education, information on Russia’s judicial system, business administration, marketing, etc.,” explain Mirja Tiri. “Our services are divided into three main groups, which are information and market services open to all, and services that are available only to our members. “Every year we make a research on customer satisfaction, among members and non-members. Last time we got the quality number 4,18 in the scale 1-5 where five is the best. As many as 98 percent of our customers are ready to recommend our services to third parties. “Export services in the fields of law, business administration, logistics and strategy are very important, since these

issues are so different from Finnish practices. In many cases the difference is considerable. Getting to know these issues through our services will help companies’ operations and many risks can be minimised. “These services are mainly used by Finns. Russians in some cases use our service to try to settle disputes on interpretation of agreements between Finns and Russians.”

Also EU Legislation Can be Tricky “The modernization of doing business in Russia does not, however, mean that business practices and ethics would be

Business Finland 5/2011

business & administration 12

similar to Western ones. Even though some Russian cities like St. Petersburg, Yekaterinburg and Moscow are more influenced by Western countries, sociocultural patterns of any country do not change in a generation or two. “The Russian Komsomol generations and modern young Russians do not possibly differ as much as sometimes insisted. And it is always good to remember that regional differences in Russia are quite big,” says Mirja Tiri. As a whole, Russia is often referred to as a very challenging business environment with heavy bureaucracy. “This certainly holds true in many issues, but it is good to remember that also Russians have difficulties on the EU market. It is not always easy to interpret EU directives or import standards. Sometimes it is difficult even to know whether to apply EU legislation or use decrees of an individual member country,” reminds Tiri. “In Finland bureaucracy is not very complicated, but in some other EU countries bureaucracy is really a burden on the same scale as in Russia.”

Business Finland 5/2011

Finnish Retail Chains in Russia Mirja Tiri believes that Russia’s Far East is an interesting business target, for example, for shipbuilders and companies that export energy equipment and services. “There are lots of opportunities for Finnish companies. In some cases cooperation between Finland, Russia and some Far Eastern countries could be very beneficial.” In October this year a contact trip was arranged to the Russian city of Vladivostok. Finns as well as Japanese participated in the trip. In addition to the Russian Far East many other regions offer great opportunities. “From the Finnish point of view, one cannot underestimate the role of St. Petersburg for Finnish companies. Retail trade increased in Russia’s second city 6 percent and has continued strong also this year. The total turnover is estimated 17-19 billion. Many Finnish retailers like Stockmann, S Group’s Prisma, Ibero, K Group’s Ruokakesko, hamburger chain Hesburger and textile company Finnlayson are already present there.

“Actually some of Finnish retailers are already in Urals regions, like Stockmann in Yekaterinurg. There are several cities with relatively high purchasing power. However, if you are based in St. Petersburg or Moscow, much more marketing effort is needed than in provincial cities.” Like Ambassador Matti Anttonen, Mirja Tiri believes that Russia will be part of WTO. “It is true that the project has been delayed. Talks have been carried on since the 1990s. At the moment the situation looks better than back then, but there are still some unsolved questions between Russia and Georgia and Russia and USA. Some disagreements are also between the EU and Russia. WTO membership would greatly benefit Russia, although some Russian business branches fear that WTO would bring competition to their field of expertise.”

Changing Business Environment In some issues Russia is still a difficult business environment. But it is changing. “Getting residence and work permits

Russians Appreciate Quality Finnish products have a quite good reputation in Russia. “It is about quality and reliability of Finnish brands. Russians are ready to pay a little more for quality products. But how to sell this added value to Russians is not always an easy task. “What is needed in many cases is a good and reliable local advertisement agency. Some Finnish agencies cooperate with local ones or have their own busi-

ness operations through daughter companies. But with a right Russian partner you can find the right channels for your message. “In marketing issues it is also worth contacting us; we can offer help through our Russian offices,” reminds Mirja Tiri.

Contacts at Many Levels Russia is a great sporting nation, and it is thus no wonder that it has been able to get some major sport events to organise. Winter Olympic Games of 2014 are held in Sochi and Football World Cup in 2018 in several Russian cities. “These top events bring many infrastructure projects like new or renewed roads, rail connections, tunnels, hotels, residential houses, sports centres and arenas. Infrastructure indeed is undergoing a major change, and top sports events as well as large international conferences (like ASEAN meeting) boost these projects.” Mirja Tiri has been working in Russian trade since the mid 1980s. “For FRCC I have worked for the last 13 years.” She also knows Scandinavia well, since

she lived in Denmark for a long time and had two university decrees from there. Experience is wide from marketing of dairy product manufacturing facilities to logistics of express deliveries. “The best experience is what I have got from selling products and services to Russia.” It is important to create contacts on regional and local levels. “There are different committees in Russian administration – from construction to investment and foreign trade committees. It is worth trying to contact these, although in St. Petersburg or Moscow this is not an easy task,” says Tiri. Russian business culture differs from Finnish, which again differs from the ones in other European countries. “But I would not exaggerate these differences. The main thing is to find the best partners and a service or product that sells well.” The FRCC numbers (12/2010) has around 850 members, about 750 of which are Finnish and some 100 Russian.

business & administration

to Russia is not an easy task, and after getting proper visas and other permits much bureaucracy still exists. Some relieves have been carried out – when entering the country with a business visa you do not have to register in the first seven days – earlier you had to register within three days. And those working in special projects do not have to register in the first 90 days. “On the tourist side, visa-free trips for cruise and ferry passengers for 72 hours were a good initiative by Russians,” says Mirja Tiri.

www.keskuskauppakamari.fi/site_eng

Business Finland 5/2011

Stockmann in Russia â&#x20AC;&#x201C; with the Force of Seven Stores Text: Klaus Susiluoto Photos: YIT

St Petersburg, Stockmann

retail & shopping

The CEO of Stockmann plc Mr. Hannu Penttilä, believes that Russian retail consumer experiences today can match with any other country. “We do our best with Stockmann department stores to offer Russians the best shopping opportunities.”

URRENTLY there are seven Stockmann department stores in Russia, of which five are in Moscow. The department store in Mega Shopping Centres Tepliy Stan and Khimki were opened in 2004, and the one in Mega Belaya Dacha in February 2007. The fourth department store in Moscow started in the Metropolis Shopping Centre in February 2009. The fifth department store was opened

in the entertainment and shopping centre Golden Babylon in Moscow in March 2010. The newest department store was opened in St. Petersburg Nevsky Prospect in November 2010, in the very heart of Russia’s second city. Another new venue was opened in Yekaterinburg in March 2011. All these units make the Stockmann brand quite well-known in Russia’s two biggest cities. The third city where

Business Finland 5/2011

retail & shopping

Stockmann operates is Yekaterinburg in the Urals. “In the city of Yekaterinburg we are a newcomer and thus not so wellknown yet. “I do not think that most our customers in Russian cities know that Stockmann is originally a Finnish brand. We do not hide our Finnish roots but also do not advertise it that much.” “As a Helsinki-based Finnish company we were the first western retailer that opened shops already during the Soviet time in 1989. Even before this Stockmann was widely known in diplomatic circles in Moscow, since many goods were delivered from Helsinki to Moscow by train. Service was mainly used by foreign diplomats based in Moscow, but also some Russians got familiar with the popular concept.”

The Very Best Location Hannu Penttilä is satisfied with the decision of establishing the department store in Yekaterinburg. “Our original plan was to open up in Yekaterinburg already in 2009, but due to the financial crises we managed to postpone the project for a couple of years. This meant that we started in better economic situation in the spring 2011. Already now we exceeded our sales targets. Possibly not so many people know that Yekaterinburg clearly is Russia’s third city with about 1.3 million people. It is very important to have our presence there. “We are lucky to be in Yekaterinburg on time. When having a retail market place in Russia, the location is essential. We have good experiences of selecting locations in the central business districts as well as in shopping centres outside of the city,” says Hannu Penttilä. “The key issue in shopping centre location is that it is attractive enough, and the commercial structure (other shops) must be the right one and traffic connections smooth.” These issues mentioned by Mr. Penttilä sound self-evident, but many inter-

Business Finland 5/2011

national companies have made mistakes in Russia when neglecting these golden rules.

Late Shopping in Russia “From our point of view, Russians are good consumers. I do not see any dramatic differences between Russian and Finnish or other Western customers. But Russian customers do differ from Finnish or other Western consumers. They spend

Moscow, Stockmann

more money in proportion to incomes in shopping than people, for example, in Finland. In some taste and style issues, they are also different. “Furthermore, we have noticed that Russians like to do shopping later than Finns, possibly because Russians are not so active in the mornings but they work late in the workday. In our stores the last hour, from 10 PM to 11 PM, is better than the morning hour, from 10 AM to 11 AM.”

Stockmann units in Russia generate about 25 percent of the turnover of the companyâ&#x20AC;&#x2122;s department store business. â&#x20AC;&#x153;With our Baltic units, we receive already one third of our turnover from international operations. In practice in the longer run, our potential is better outside of Finland, and non-Finnish operations

Furthermore, we have noticed that Russians like to do shopping later than Finns

Business Finland 5/2011

retail & shopping

Finnish, Baltic and Russian Stockmanns

retail & shopping

The Crazy Days concept is possibly one of the worldâ&#x20AC;&#x2122;s most exciting department store campaigns.â&#x20AC;?

St Petersburg, Stockmann

Business Finland 5/2011

Crazy Days Success also in Russia Stockmann has seen ups and downs in Russia, says Penttilä. “Unfortunately Russia is still a country with heavy bureaucracy. Much inefficient, even futile, work is done, or you will have to do too much extra work to fulfill the norms.

“For us, by far the worst setback for us was the closing of Smolenskaya department forcibly by the landlord, in spite of the fact that Moscow’s international court of arbitration decided the dispute in favour of us. The court even ordered that the landlord be obliged to pay indemnification for Stockmann. But the enforcement of the decisions by the international court of arbitration is not

retail & shopping

will be more than our Finnish operations in terms of turnover.” Hannu Penttilä believes that Russian operations will be profitable quite soon. “The financial crises of 2008 combined with our strong investment program as well as the closing of one of our stores at Smolenskaya in Moscow made a negative economic impact on our profitability. We are targeting at positive results for the next year (2012). Naturally we cannot be immune to global economic crises. But if the economy in Russia develops without crises and Russia’s ruble remains relatively strong, we can achieve the positive results.” When asked about Russia’s WTO membership, Penttilä says that “for all the 19 years during which the WTO membership has been on the agenda, I have hoped that Russia would join the World Trade Organization. It would ease the operations of companies in consumer products and to some extent bring down the price level through lowered duty fees. But I am afraid that it is not only an economic but also a political issue.”

Lindex and Seppälä Stockmann is not only a department store chain. The parent company Stockmnan Group owns also the fashion chains such as Lindex and Seppälä, so the Stockmann group actually has more than 80 shops in Russia. Seppälä has been in Russia for a longer time. The Lindex chain opened its first unit in Russia in 2008, after which it has enlarged fast. Both these businesses do well in fierce international competition. Russian market will be important for Lindex and Seppälä also in the future.

Moscow, Stockmann Business Finland 5/2011

retail & shopping easy in Russia. This is a serious threat in the investment atmosphere”, says Penttilä who is a lawyer by profession. “When doing basic business agreements with Russian companies, there are not big differences. But to get legal protection of agreements can be difficult. The most important issue is to find out your potential business partners’ background. “But we do have real successes in Russia. We were able to build a wonderful shopping centre on the site owned by us. The center is located in the historic part of the great city, St. Petersburg. It is called the Nevsky Center, functions well commercially and respects the historic centre of St. Petersburg. “We also have been successful in Russia with our Crazy Days campaign, which started from our Finnish stores but is nowadays familiar to all units in Finland, Estonia, Latvia and Russia.” The concept Crazy Days is possibly one of the world’s most exciting department store campaigns. Yellow plastics and paper bags can be seen all over in “Stockmann cities”, and it is not at all a traditional sales concept. “Almost all the merchandise is new and brought only for the campaign. This autumn in 2011, the Crazy Days campaign was carried out also in Yekaterinburg and St. Petersburg new units.”

www.stockmann.ru

Business Finland 5/2011

retail & shopping Personnel in Tallinn and Riga Stockmann also operates in the Baltic cities of Tallinna and Riga, capitals of Estonia and Latvia respectively. The Tallinn department store was opened in April 1996. The Baltic department stores have been successful right from the beginning. Only the crises year 2009 was diffi cult. On the other hand, recovery was quick. Both Estonia and Latvia have a large Russian minority. It is thus quite natural that the company as an international retail chain serves the customers in their native language in the Baltic capital cities.

Moscow, Stockmann Business Finland 5/2011

PAULIG For the Friends of Real Coffee

Text: Klaus Susiluoto Photos: Sini Pennanen

Demand of high quality “real coffee” is increasing in Russia. Elisa Markula, the Managing Director of the Paulig Group Coffee Division, sees Russia as a market of great opportunities.

The local production in Tver allows production of quality coffee both to mainstream and economy price segments..."

food & beverages 24

Tver Coffee Roastery Serves Russian Coffee Drinkers

Business Finland 5/2011

“We see Russia and the neighboring countries as an important growth market. The opening of the Tver roastery in September is an important step for Paulig to increase our sales and strengthen our market position in Russia,” says Elisa Markula. “Local production brings us many competitive advantages. We are more flexible with our product portfolio and can more easily develop products that meet the needs of local consumers.

“Without having to pay high import duties we can also succeed in price competition. In addition, local operation streamlines our logistical operations and improves customer service.”

Support from Tver Region

cutting edge solutions

offee consumption is increasing in Russia, especially in the big cities. Russian coffee market is still relatively small per capita. Coffee is drunk as an instant version, but the demand for “real coffee” is increasing. At the moment it counts only 30 percent of the total coffee market. With these things in mind, Paulig invested in a brand new roastery in Tver, 160 km from Moscow.

The roastery was built in Borovlevo Industrial Park in the Tver region, which will serve Russian as well as also other CIS markets. The value of the whole in-

Business Finland 5/2011

vestment is about 23 million euros. “It was not easy to find a good location. We surveyed more than 30 different sites. “The Finnish company Ahlström has been located in Tver for years, and they

had positive experiences of the industrial area.” Also investment attractiveness of the Tver region, reasonable land pricing and desire of the regional authorities to provide support and assistance weighed in

the selection. The location just 160 km from Moscow was considered beneficial. “But Russia also has ten cities with one million or more inhabitants. Our goal is not only in Moscow. We had offices in Moscow and St. Petersburg, and sales representatives in Novosibirsk, Samara and Yekaterinburg even before the Tver roastery.

Premium Products In the future, Paulig will keep the focus on high quality products of the Paulig brand. “The local production in Tver allows production of quality coffee both to mainstream and economy price segments. In addition to our own products we can offer private label production services in the future,” says Markula. “Our product range will include a vast selection of real coffees from filter coffee to espresso and turka grind (Turkish coffee) that fit the ways of making coffee in Russia. The new roastery will manufacture Paulig President, Paulig Classic, widely-known and popular among consumers, as well as HoReCa coffee products. This autumn we launched the new Paulig Mokka coffee.” In spite of excellent products it is not easy to compete and market coffee. The most crucial competition is done inside shops. Competitors are both local and international brands. "Although the current high green coffee price brings price pressures, we believe that coffee consumption in Russia continues to be on the rise, so there are growth opportu-

Business Finland 5/2011

Paulig coffee division in a nutshell Paulig is Finland’s largest coffee company. Besides coffee roasting the company has expanded into out-of-home coffee markets and is the market leader in coffee services in Finland and Estonia. Paulig’s main roastery and head office are located in Helsinki, where new premises were taken into use in September 2009. Paulig Coffee Division is part

of the Paulig Group, an international food-industry enterprise known for its international food concepts, spices and industrial flavourings. Turnover of the Paulig Group was in 2010 nearly 780 million euros and the amount of employees about 2000 in 15 countries. The share of coffee business is nearly 40 percent of the turnover.

food & beverages

nities for several coffeemakers,” says Elisa Markula. Advertising in Russia costs a lot of money. “We have had TV advertising, but not that much. Since the costs for TV advertising in Russia are high, we do not see it as cost effective.” One key to success is to understand and find out Russian coffee preferences. Dark roasted coffee is more popular in Russia than in Finland. Elisa Markula reminds that the quality of water is important for the taste as it is the main component in a cup of coffee. “For example, the same coffee can taste different, depending on if the water contains lime or not. The lime-rich water is required for dark roast coffee.”

Strict Quality Control The roastery in Russia functions in the same way as the new plant in Finland. The production process is based on the same logic and both factories use ISO 22000-system in managing product safety and quality control. The key personnel in Russia have been trained in Finland. The production capacity of the new roastery is 6000 tons annually, but extending the production is possible if needed. The factory employs 40-60 persons. Altogether there are approximately 100 employees in the Russian division. “The capacity of the Tver plant will be sufficient for the next few years and possibilities for an extension are taken into account on the construction. “Construction during a recession was financially logical and gave us a good basis to go ahead at full speed when the economic upswing gets under way again.”

www.paulig.com

Paulig World Design Capital Partner for 2012 Paulig is one of the partners of the World Design Capital 2012. Paulig’s coffees and design will be combined in many interesting ways during the year. “Co-operation with WDC Helsinki 2012 offers us an inspiring environment and a chance to bring coffee and coffee culture close to all friends of coffee. Design and Paulig have a natural connection. Where a designer has to consider materials, shapes and functionality, Paulig has to take into account coffee qualities, roasting, the right milieu and service with its every little detail when creating enjoyable coffee moments. Design is also strongly present at our new coffee roastery,” describes the Marketing Director Karri Kauppila from Paulig. “Paulig has a strong influence on coffee and our coffee culture here in Finland. I’m confident that our co-operation leads to good results and brings new dimensions to our visitors’ concept of design,” says WDC Helsinki 2012 leader, Pekka Timonen.

Business Finland 5/2011

cutting edge solutions

Milk

Know-How from Finland

Text: Klaus Susiluoto Photos: Sini Pennanen

Business Finland 5/2011

dairy company in Finland. In Russia, Valio cheese is known first of all, but the company has truly varied milk-based products. In milks it is one of the most high

Nutritious plus milk makes an excellent snack for adolescents. For senior citizens it contributes a good dose of protein, calcium and vitamin D to their diet, maintaining bone structure and muscle fitness."

food & beverages

Valio is the leading

quality and innovative companies in Europe.

ALIO PLUS™ Maito (Valio Plus Milk in English) is another product that could attract also non-Finns, yet only few exports efforts have been made.

Plus Milk Sells Well Valio Plus Milk is extra nutritious milk providing many times the amount of the beneficial nutrients contained in ordinary milk, for people of all ages and for many different uses. This drink is a new proof of Finnish expertise on developing healthy and tasty milk products. “Nutritious plus milk makes an excellent snack for adolescents. For senior citizens it contributes a good dose of protein, calcium and vitamin D to their diet, maintaining bone structure and muscle fitness,” says the Product Group Manager, Jani Pasanen. Valio Plus contains more key milk nutrients than basic milks. “This means twice the amount of vitamin D and 50 percent more protein and calcium. The

plus milk is also a good source of B group vitamins, plus added folic acid which is especially important, e.g., for pregnant women. Its high protein content gives plus milk a fuller taste,” says Jani Pasanen. Fat free Valio Plus contains more nutrients than ordinary fat free milk and thus improves exercise recovery, enhances muscle growth at the same time when it assists in weight management. “Milk whey protein has been shown in studies to promote muscle recovery after exercising, enhance muscle growth, and promote weight loss as does the calcium in milk. According to studies, whey protein seems in fact to be a uniquely beneficial protein for the human body,” says Jani Pasanen. Two glasses of Valio Maito Plus provides an adult daily requirement for vitamin D and calcium, and around one third of that for protein. For sportsmen and women, Milk Plus is an excellent source of protein. Awareness of protein has increased among customers. There is less talk about fats today. The

Business Finland 5/2011

food & beverages

future for protein-rich milk seems bright. “Valio Plus can be heated, e.g., for hot chocolate, but does not tolerate boiling. It is suitable for use in baking and cooking and as a coffee whitener,” adds Valio Product Manager, Paula Viikari.

Fermented Milk Plus Paula Viikari reminds that there is on the market also Valio Fermented Milk Plus.

Valio Plus Milk has been on the market since September 2010, and the fermented milk came out a year later. “In some countries fermented milk products are used only in limited scale. Even in Finland fermented products are mostly used by adults. “But this is changing with new products. The taste of our Fermented Milk Plus is smooth. Even my 2.5- year-old god son drinks the fermented plus.

“For Russians fermented milk products are familiar, so there could be some options for Russians with our plus products”, concludes Viikari.

Natural Drinks “There is a trend to natural drinks,” continues Jani Pasanen. “In this field Valio has a good position. “We have sold Milk Plus twice as much as we planned,” says Jani Pasanen. At the moment plus products are sold only in Finland, but exports is possible. “So far, we have only made some initial surveys. In Finland fairs have been good marketing tools, since it is easy to get people to taste new choices. We have even won new users for fermented milks.” Valio Plus fat-free milk is appreciated by consumers. The product won the Star Product of the Year 2011 competition, which is the most renowned Finnish competition for new food and drink products.

www.valio.com

Business Finland 5/2011

dients and licensing Valio Zero Lactose technology to customers for use in their own manufacturing. These products have been a great success wherever they have been introduced. Valio Zero LactoseTM technology or ingredients have already been launched in Switzerland, Sweden, Spain, South Korea, Belgium, France, Russia, the Baltic countries and Norway.

Tasty Without Intestinal Problems Valio had introduced a range of low lactose products (HYLA) even before the lactose-free product family. However, many consumers shunned in particular HYLA milk due to its slightly sweet taste. Then a little more than ten years ago, Valio launched a world first, completely lactose-free milk drink that tastes just

Business Finland 5/2011

food & beverages

NE OF VALIO’S success stories has been lactosefree products, which celebrated ten-year’s existence on the market. Intolerance of lactose, or milk sugar, had until that time forced many people to exercise care when it came to fresh dairy products or even to eliminate them from their diet. Valio was the first in the world to launch a totally lactose-free milk with the real taste of milk. The company is the market leader in Europe. The license of lactose-free milk and other products has been sold to South Korea, Spain, Switzerland and Norway. New countries could follow suite. Valio makes lactosefree products available to the food industry worldwide by selling “Valio Zero LactoseTM” ingre-

food & beverages

like regular fresh milk. Tasty yet completely lactose-free products have been a major competitive success for Valio both in Finnish and international markets. This benchmark innovation has gathered more consumer praise than any previous Valio products, as what counts most is an alternative available to consumers. The lactose-free milk can be consumed by people who suffer intestinal problems brought on by even the smallest quantities of lactose. Valio’s lactose-free products accounted for some eight percent of the group net sales in 2010. The company apparently gets better margins for lactose-free products than for bulk products. Today lactose-free products include also creams, butter, fermented milk, smetana, ice-creams, etc..

One of the latest lactose-free applications is to use Valio Zero LactoseTM skimmed milk powder in milk chocolate manufacturing. The Zero LactoseTM performs similarly to a standard milk powder, but enables producers to create a kind of lactose-free milk chocolate novelties that consumers are increasingly asking for. There’s a growing market for lactose free milk chocolate in Europe in particular, but markets could be found elsewhere also.

www.valio.com

Ecocertiﬁcate for Russia The members of Valio dairy products sold in Russia carry the Eko-Test-Plus symbol granted by the Federal Government Institution “Center for Testing and Certification – St. Petersburg” (Test – St. Petersburg). The symbol was introduced in 2004 to indicate that an item creates the minimum possible environmental burden in production. Russian consumers already find the symbol displayed on, e.g., Valio’s butter, smetana and ESL milk packages and Valio is now applying for an ecological certificate for creams too. Tatiana Yakovleva, Director of the Certification Department for Products and Services at Test – St. Petersburg, audited Valio’s cream production at the Turenki plant in June 2011 to investigate the cream’s ingredients, packaging materials, ecological production factors and production documentation. A certification group comprising experts from Test – St. Petersburg and the Saint-Petersburg Ecological Union will then rule on granting the Eko-Test-Plus symbol. Test – St. Petersburg has granted obligatory certifications (GOST Certificate of Conformity) for Valio products since 1995. These certificates are mandatory in order to import and sell a product in the Russian Federation.

www.valiorussia.ﬁ

Business Finland 5/2011

food & beverages Business Finland 5/2011

Designing

constructions

in Russia Text: Klaus Susiluoto Photos: Sormunen & Timonen

The constructive design company OOO Sormunen & Timonen has succeeded in entering the difficult construction service market in Russia.

Business Finland 5/2011

ormunen & Timonen Oy was established in 1979, and is located in Kuopio, Finland, with operations also in St. Petersburg, Russia’s second city. Architectural and structural engineering comprise the largest part of the company’s

services. Additional areas of concentration include building renovation and prefabricated unit engineering. During its 30-year’s successful operations, Sormunen & Timonen Oy has accomplished over 3000 different structural and architectural design projects including residential buildings, commercial buildings, industrial buildings and warehouses, special constructions and public buildings. Building renovation is an important part of operations. The sister company of Sormunen & Timonen in Russia is called OOO Sormunen & Timonen, and it has operated almost for five years as a company. The Russian office is in St. Petersburg. The sister company is steered by Mr. Pekka Karttunen who has been satisfied with the company’s business base in St. Petersburg. “Altogether we have been in Russia for more than 10 years. Our

Our strategy in Russia is similar to that in Finland. The aim is to be a construction design office with varied services." Business Finland 5/2011

real estate & construction 36

strategy in Russia is similar to that in Finland. The aim is to be a construction design office with varied services. “Communication between offices proceeds well. We use electronic means of communication, but we find it also important to meet regularly especially during projects in Russia or in Finland. In the beginning we had certain language barrier, but the situation is rather good today. In both our offices we have persons who speak both Finnish and Russian,” says Pekka Karttunen. “When it comes to our strengths in Russia, we can offer very cost-efficient solutions compared to our local competitors. Schedules are thoroughly thought beforehand, so we keep our timetables. We have persons who have excellent

Business Finland 5/2011

knowledge of local norms and building standards. “Last but not the least, both of our offices are fully computerized, allowing the usage of engineering programs with the capability to perform strength and bearing calculations. Data processing technology is used for drafting and handling construction plans and other documents. All design work is based on CAD technology and its extensions.”

Make Detailed Agreements “Everything concerning Russia by no means does not go through the St. Petersburg office,” emphasizes Karttunen. “The Kuopio office makes plans for different Russian projects as well as administrative

work to study Russian standards. “Almost right from the beginning we understood that Russia is a world of its own. You just have to know the local instructions and business manners. It is true that step by step Russia is approaching the West in many issues, but there is still a long way to go.” In Karttunen’s view, reliability in the business environment in Russia has improved much. “If you take some preventive measures, there is nothing to worry about and you can do business as usual.” This, however, does not mean that there would not be differences compared to Finland or some other countries in Europe. “Our customers include large Russian construction companies, with whom

Do not Advertise by E-Mail Bureaucracy can bring much hindrances and delays, but after certain stage, it is possible to have confidence with different regulating organizations. “Marketing in Russia happens by meeting people and making rather close

friendships. Advertising by e-mails or by letters is utterly futile and waste of time and money. Opening up market for your products or services means marketing by walking and setting strong foothold when meeting the right partners,” says Pekka Karttunen. Sortim has adapted well to the local business culture, and already more than half of revenues come from projects outside of Finland. By far the most important area in Russia is St. Petersburg, but projects have been in Moscow, in Siberian oil fields, South Russia, etc.. Some projects have been in Ukraine and Kazakstan. “However, in spite of the relatively good situation today in building projects it is good to remember that we are

still behind the construction activities in 2007. Because of the crises during 2008-2009, in St. Petersburg 87 percent of projects were postponed or cancelled. Many were started again, but we and the whole branch are still catching up,” reminds Pekka Karttunen. “One trouble, though not always present, is Russia’s WTO membership – or the lack of it. Our exports are immaterial, not goods, so the lack of Russian WTO membership does not count so much to us. But indirectly it has some effect. Namely, as a member of WTO, Russia would in all the likelihood get more large industrial investments, new industrial premises, for example, and through this, offer more opportunities for us.”

Business Finland 5/2011

real estate & construction

business is done in another way (than that in the West). It is very important to formulate agreements in a detailed way and take all possible aspects into account. To put it short, making agreements is much more challenging in Russia. “Even though we have already much information from our branch, we use quite regularly also services from law offices.”

real estate & construction

cious about element solutions anymore.” OOO Sormunen & Timonen have had many large-scale structural engineering projects in “living complexes”, which vary from around 15 000 to more than 100 000 measured in square meters. “Our clients include large construction companies such as ZAO YIT Lentek, ZAO YIT Moskovia, OOO NCC Development and Lemminkäinen RUS.” Pekka Karttunen reminds that OOO Sormunen & Timonen is not only a constructive design company. “We design panels and elements, do consulting, plan projects of reconstruction and interior

Apartment Expertise – and Much More Many projects by OOO Sormunen & Timonen have been apartment buildings. “Residential houses made of concrete prefabricated elements have had a bad reputation in Russia, and for good reason. The quality of prefabricated element buildings in the Soviet time was not that

Business Finland 5/2011

good. With the know-how from Finland and several other countries the situation is much better today. It is good to remember that also in Finland there were troubles in concrete buildings, but in the last 20 years technologies have developed in the West as well as in Russia, and Russian element manufacturers have invested in quality. Apartment buyers are not suspi-

Marketing in Russia happens by meeting people and making rather close friendships. Opening up market for your products or services means marketing by walking and setting strong foothold when meeting the right partners."

www.sortim.fi

Business Finland 5/2011

real estate & construction

designs. For example, in Krasnodar we made extension and modernization projects. For the business centre and living houses Ivana Franco in Moscow we made elements design. For the multifunctional business centre Rostokino we made traditional constructive design. This was a very large project. For the paint company Tikkurila we made design of elements and constructions. We have had minor projects also outside of Finland and Russia, for example, in Moldova and Ukraine. Both these were supermarket projects.â&#x20AC;?

Consulting for Russian markets

Konsu, a Finnish consulting company located in Lappeenranta, started business operations in Russia in 1992. Konsu was the first western company to do so. Almost twenty years later Konsu has grown to be an important player in Russian market. About one third of all Finnish companies doing business in Russia are customers of Konsu. Customers are not only from Finland as there are also companies which are located (as an example) in Germany, Netherlands and the United States, which are buying services from Konsu. Konsu’s new name is Accountor Konsu Oy. Konsu belongs to Accountor Group which operates in 8 different countries. Text: Jarkko Repo Photos: Konsu

he company was established by Pirjo Karhu who with her family members sold the company to Pretax in 2009, Karhu continued her work for the company as the chairman of the board. In 2011 Pirjo Karhu became CEO again when the earlier CEO had to move away for private reasons. − Previously (when she was the owner and the CEO) we had a very open business culture, which has been continued by the new owner. I was also a very active chairman of the board during the time I was in that position. And as I had personally hired the key personnel – it was easy to step back in into the daily activities. Said Pirjo Karhu concerning her position as CEO. − The growth goals for the company are around 20%. My work is mainly to ensure profitable growth. To achieve the growth we need to look for new markets, such as Germany where we can help companies to get into Russian market. We are also looking for Spanish speaking areas for growth. The possibilities for growth in Finland are limited as Konsu already has a large percentage of the business. Currently Finnish companies are around 70% of the business in St. Petersburg and around 50% in Moscow. Since 2008 Konsu has been involved in Ukrainian market. Currently there are nearly hundred Finnish companies in Ukraine but approx. 2000 companies from Germany. Therefore

Business Finland 5/2011

The Company of the Year 2010. Konsu SP was awarded the title the best company of the year in Russia.

consulting Pirjo Karhu, CEO of Konsu Business Finland 5/2011

Konsu SP, St. Petersburg, the 15th anniversary celebration.

it was logical to establish a subsidiary in Ukraine and also in Germany. − There are many similarities with the Russian market in Ukraine. We are also looking into CIS countries for example Kazakhstan where they see Finland as an great example. However, there are only few Finnish companies established at the moment. And as Russia is around 85% of our turnover, we will be working hard with that market. Konsu is currently establishing a second office within the Moscow region. Konsu has already established subsidiaries in Russia (Moscow and St. Petersburg), Germany (Stuttgart and Munich) and Ukraine (Kyiv). The head office has stayed in Lappeenranta and they also have an office in Helsinki, Finland. With 160 specialists Konsu can offer services to almost all needs. − But to reach the growth targets we've had to develop new services and products for our customers.

Business Finland 5/2011

The new services are being developed currently. Konsu will be offering market reports and market research to it's customers within next few months. They have hired a person who has worked with marketing and advertising in Finland before to take care of this new product. Konsu is also expanding its services to find the mid level management personnel in Russia. A lot has happened during the 20 years in Konsu. Pirjo Karhu had bought an accounting firm and during the late 80's she started looking for something new to do. At the beginning of the 90's she started to research the possibilities in Russia. When it was made possible to own a company in Russia by foreigners – she was there. − We were the first in Scandinavia to have a quality certificate for our accounting company. My idea was that it must give us some possibilities in Russia. Soon after Soviet Union collapsed Konsu board made a decision to enter on

Russian market. Pirjo Karhu visited St. Petersburg couple of times. Instantly she knew that the area will have a demand for business services. − My gratitude goes to the lawyer from St. Petersburg's mayors office who helped us to get started in the new market. Now we have helped to establish almost 1000 companies in Russia.

Konsu Services Konsu can help its customers on various phases of business. The key to a successful breakthrough into a new market is to focus on your own business idea and leave other aspects to professionals. Even more so in Russia. Konsu’s full service concept serves clients from start-up to liquidation. Business start-up and legal services from Konsu help you to choose the correct mode of operation. In Russian market it's also vital to have to right registrations,

from establishment to mergers and acquisitions. Services may include business development, problem solving, finance management in tax, legal, audit and special consultation issues Says Dr. Michael Spaeth. It's not just the opening of the new business which needs to be taken care of. Russian laws for taxing and all of the other legal requirements need to be met. As a growing market, taxation and other laws are constantly changing in Russia. Konsu also offers financial management to take care of one’s needs for governmental issues. However – now that the permits and licenses. Konsu has done multiple projects in which they have taken care of everything. Just to list a few of their services, Konsu can help you find and recruit the right personnel, acquire premises, open bank accounts and do the declarations to the local authorities. Accounting and tax advising services consist 75% of Konsu turnover. The key idea behind using a consulting company for Russian markets is that, it is not enough to just know the local laws but one should also have solid local contact network. As Konsu has been working in the Russian market for longer than anyone else – they have all of those ready. − Konsu is one of the leading full service providers in central Russia, in terms of financial services, consulting and outsourcing. We understand the phrase of a ”full- service provider” as an Service Provider, that has its expertise in providing a comprehensive range of financial services to businesses through the full life cycle

consulting

We were the first in Scandinavia to have a quality certificate for our accounting company. My idea was that it must give us some possibilities in Russia." business is up and running – a company might need help with other legal issues, such as contracts and labor laws. With the force of 160 professionals, Konsu can help you with all of the above. It's not that the Russian market is worse than others, the growth in some areas has made the system confusing. These are only few of the reasons why several international companies are buying consulting services for the Russian market. − Russia is a fascinating market. It offers enormous opportunities, but for success you need to understand the specialties of Russian business culture (Pirjo Karhu).

The office of Accountor Konsu Oy, Headquarter

Business Finland 5/2011

consulting

One needs to weigh the possibilities and the risks. By using a consulting company all the way to the running business the risks are lessened. Konsu also offers services to evaluate the risks.

Anti-crisis tool kit Konsu offers a service to companies which are already in the Russian market. Anti-crisis tool kits purpose is to help recognize and evaluate the most critical clauses and stipulations in the customers business from the cost savings point of view. The basic idea of the anti-crisis tool kit was born at the moment of the last crisis beginning at the autumn 2008. Konsu specialists recognized that there were many clients and other companies facing the economical depression without a clear picture of their position, resources and business solutions how to manage the challenge of the new situation. The purpose of the tool kit is to help the client to recognize and evaluate the most critical clauses and stipulations of the client’s contracts and business relations from the cost saving point of view. Further the tool-kit defines and clarifies the legal opportunities to renegotiate contracts and their terms and conditions, or even to terminate the contracts. The focus and target of the tool-kit is to minimize the negative consequences of the challenging business environment and create more workable and cost effective contractual framework for the business development in future. At the end of the day, after the strict due diligence of the situation & company and review of alternatives, the final solution can be even the liquidation or temporary closing of the company. The client shall make the final decision on the action list. (Jari-Pekka Tyyskä)

Anti-crisis tool kit The purpose of the new tool kit is to help the client to recognize and evaluate the most critical clauses and stipulations of the client’s contracts and business relations from the cost saving point of view. Further the tool-kit defines and clarifies the legal opportunities to renegotiate contracts and their terms and conditions, or even to terminate the contracts. The focus and target of the tool-kit is to minimize the negative consequences of the challenging business environment and create more workable and cost effective contractual framework for the business development in future. The start-up phase of the tool kit is the legal due diligence and feasibility test of the current contracts. According to the findings and summary report of the start-up phase, the client and Konsu advisors consider thoroughly various solutions and alternatives for actions. The client shall make the final decision on the action list. CONTENT OF THE TOOL KIT • Defining and collecting of the important contracts and other legal documents • Cost saving possibilities on the basis of lease contracts (office and production facilities) • Optimization of personnel costs within the frame of the current labor contracts including the amendments, cutting of work hours or even terminations of the current contracts, either on voluntary basis or solely by the employer according to the Russian Labor Codification • Outsourcing of certain business activities through contractual arrangements • Opportunities to sell or divest certain business assets or to “sale lease back” arrangements • Speed up of the collecting of receivables • Assistance in and development of tax planning and optimization • Checking the possibilities for rearrangements of debts, payments and collaterals • Temporary closing or liquidation of the company Contact person: Jari-Pekka Tyyskä, +358 404 876 202

Other way around Konsu consults Russian companies to establish business in Finland by giving legal consultation in juridical issues and providing accounting services. − It's basically the same what we do in

Get-together and wellness of the staff. 44

Business Finland 5/2011

www.konsu.com

Kaisa Saarinen, Master of Science, Economics, Konsu Moscow. Kaisa joined the Konsu team, her specialty is research services.

consulting

Russia for Finnish companies. (Pirjo Karhu) The most obvious consulting and help is in establishing a new company in Finland. − In Russia you have to go through around 20 phases to establish a new company which is similar to the Finnish limited liability company – in Finland it's a lot easier, but there are still aspects which need to be taken care of. Further, Konsu Accountor Group assists the Russian and other foreign persons or companies not only to establish the business but the full start up package parallel as Konsu works in Russia and Ukraine for foreign entrepreneurs. This means among other things assisting in formation of a board as per EU requirements, obtaining permanent work permits and other permits for business, drafting shareholders agreements and other corporate administration documents, drafting of manager & employment agreements, acquisitions of real estate & construction contracts, acquisitions of existing companies including due diligence service in Finland and drafting of sale & purchase, agency, distributorship and other commercial contracts. (Jari-Pekka Tyyskä) What Finnish companies see as a challenge in Russia, it's the other way around also. The most important thing is always to understand the local culture. No matter which way your company wants to go – Konsu can help you reach your goals.

Konsu is one of the leading full service providers in central Russia, in terms of financial services, consulting and outsourcing." Case Example UPM Supporting everyday activities UPM, one of the world's leading producers of printing papers, has production in 15 countries and an extensive sales network comprising more than 170 sales and distribution companies. UPM has been the client of Konsu since 2003. Over the years, Konsu has executed a large number of projects and provided a wide range of services. They continue to provide business administration services to two of UPM's Russian subsidiaries. They also offer legal services to the group's subsidiary in St. Petersburg - contract preparation and reviews, work permit, applications etc. - as well as other consultancy services. "We are very pleased with the prompt and knowledgeable services provided by Konsu. Their expertise in both Russian jurisdiction and the requirements set by public authorities has greatly speeded up the establishment of our business in Russia. Konsu's business administration, legal and other consultancy services continue to support us in our everyday work," says UPM's Juhani Hongisto, Director of Forestry and Wood Sourcing, Russia.

Business Finland 5/2011

How do you

define innovation? Text: Krista Kauppinen Photos: Juha Rahkonen

Arms Crossed

MarshallGoldsmith

Business Finland 5/2011

consulting W Chan Kim

When you think of innovation what comes to mind? The standard answer is something along the lines of “a new product or service that people are willing to pay for” or “a successfully commercialized invention”. This tends to be especially true in companies with a strong engineering culture.

RODUCT-LED INNOVATION is necessary, but as best practices in innovating are increasingly adopted, the innovation capabilities of companies are advancing in a way that makes it more and more difficult to differentiate through innovative products alone. Customers are looking for more customized products and services, partner organizations are seeking ways to work more closely together to produce a more

competitive offering. Thus the need for open innovation, for ways to involve people, ideas and technologies from outside an organization’s borders is increasing. Today, the term innovation is being used more loosely to describe the process of creating new things and development in general. In a rapidly changing business environment, the importance of innovation on success has grown. As a result, companies, as well as the academic world,

Business Finland 5/2011

consulting have been working to develop new thinking, models and concepts for innovating not just products, but services, business models and leadership as well.

The largest leadership conference in the Nordics VIA Group takes the broad view on innovation. The next VIA Leaders’ Forum’s theme is “Innovate or fade away”. There, talks will cover topics ranging from open services innovation to the tools, structures and leadership systems that support innovation. The twelfth conference of its kind will have keynotes from renowned leadership coach Marshall Goldsmith and the father of open innovation professor Henry Chesbrough. Other speakers include trend analyst Magnus Lindkvist, Professor Liisa Välikangas of Aalto University, Managing Director of CDI Global Jeffrey A.

Business Finland 5/2011

Schmidt, Founder and CEO of CitizenM hotels Michael Levie, Governor of the Bank of Finland Erkki Liikanen and CEO and leadership guru Tero J. Kauppinen. Organized since 1983, VIA Leaders’ Forum has claimed its place as the largest leadership development forum in the Nordics. Now it’s being organized for the 12th time on February 16th 2012 at Helsinki Exhibition and Conference Centre.

Over the years, VIA Leaders’ Forum audiences have heard from leadership thought leaders such as Michael Porter, Gary Hamel, W. Chan Kim and more than a hundred other top gurus, visionaries and professionals. Come update your views and expertise – welcome! Bring the other top leaders in your organization with you! www. vialeadersforum.fi

The most extensive leadership study ever done in Finland."

consulting

Leadership innovation 2011 marks 100 years since Frederik Winslow Taylor began his research in analyzing factory workflows to improve efficiency and labor productivity. Much has changed in the business environment since then, but leadership research still mostly focuses on the manager and his impact on his employees. “In reality, leadership is a broad and multidisciplinary. This limited perspective in leadership research has also limited leadership innovation.” says Tero J. Kauppinen, who conducted the largest leadership study in Finland for his PhD thesis. According to traditional leadership research, leadership only has a 20% effect on results. This is in stark contrast with

senior managers’ practical experience: nine out of ten leaders see that leadership has an over 50% impact on outcomes. In the last few years leadership research’s focus has expanded to study the impact of the leadership’s context. This has led us to realize how, for example, business environment, organizational structure and culture can impact results more than the leader as a person can. It’s hard to imagine that a company could create competitive advantage or achieve organizational change without committed leadership. Leadership context defines, to a surprisingly large extent, what methods work and how much of an impact leadership really makes. The findings of the research have been

built into a leadership development program called Gazelle Leadership. “The program focuses on the ideas which have the greatest leverage on leadership effectiveness. The intention is to respond to the key leadership requirements, which are derived from the rapid changes in organizational and business context.” Kauppinen promises. The program is debuting in January 2012.

www.viagroup.ﬁ

Business Finland 5/2011

From Finland into Russia with love

Text: Jarkko Repo Photos: Markinvest, PhotoAlto

Business Finland 5/2011

arkinvest Oy, a Lahti based company, has been consulting companies for almost thirty years. During that time, the owner Pekka Peltonen, has been through multiple projects. − No company should try to get into the Russian market if they aren't doing it with love. The companies need to be there for the customers, it's not an easy market to succeed in. Markinvest Oy has seen the good years and the bad years in the Russian market. No matter what has happened, Markinvest has been going strong helping their customers to succeed. Peltonen is working in multiple projects and when he is telling about those, one can easily see the passion he has for his work. These personal aspects are the key into the market. Peltonen surely knows all the potential pitfalls these days. Even with all the negative aspects he has been able to continue to built up the personal contacts in Russia. He surely is a man doing the consulting not for the love of money but for the love of the Russian culture.

Certiﬁcates and other cumbersome things Markinvest is widely known for their knowledge in certificates for the Russian market. They've also got into the Belarusian, Ukrainien and Kazakhstanien market with their certificate services. − All of those are different markets with their own specialities. Still the common view is that one needs to have the personal contact with the customer in all of these regions. Peltonen has a strong understanding of all the mentioned markets. He has been personally involved in almost all the projects his company has had. − We are now getting customers from all around the world to do the work relating to sertificates within these markets. And as with some other Finnish companies, it's starting to go the other way around also. − And we've started to consult our contacts in Russia (and all the other coun-

The person doing the business within the new market must have love for his job, love for the region his working in. It can't be done any other way."

Business Finland 5/2011

finance & investment Pekka Peltonen

tries) how to get into the western market. How to get the right licenses, sertificates and so on. Certificates seem to arise everywhere within the growing markets. The laws keep changing and the culture is getting more and more western when it comes to the ways of doing business. But the right papers will not get anyone further.

Getting into the market Markinvest has been offering a great product for market penetration for years. While the basics have been the same there has been some minor development, but overall the service is just the right one to get into the market. − Our best service is in finding the right contacts. Without those, our customer can't basicly do anything. The next step is to arrange a small conference which is held by our customer and us to the companies which are the potential contacts. The contacted companies might not sent their key personnel at this point. But if the conference is done in a way that it provides enough information and shows the business possibilties – the companies will be fast to react.

Business Finland 5/2011

This is what Markinvest is known for. Organising actions which provide a fast way to the market. − It takes around four weeks to organise the small conference. More time is better, but it can be done in a very short period of time. With all new markets, companies need to give it time. However the current situation in the world is that project managers are on a tight schedule. If nothing is happening, the export projects are ended, sometimes too suddenly. − Even if we can get the customers interested within the first conference. It takes time to turn it into a business. Companies need to remember whom they are competing against. If there is a local company providing the same products, why would anyone order it from abroad. Our knowledge helps to get close contacts which then need to be taken care of. In Russia the customer wants to have a personal contact instead of just a business contact. This needs to be remembered. A Finnish company needs to do a lot of work before they are seen as a good choice for the local competitor. Peltonen gets even deeper into this subject when talking about, how to be

better in Russia than the local companies. − The local companies might have family ties, the CEOs might have been in the same school, university or served in the same group in the military. A western company needs to be better than all those possible entanglements between the customer and the local provider. This might seem like an overwhelming situation and to some, it is. Markinvest is a great partner when building up the business within the markets Markinvest is operating in. But a consulting company can't be running the business for their customers. − The person doing the business within the new market must have love for his job, love for the region his working in. It can't be done any other way. One might ask how to find this ”love” for the market. In a financial point of view, the ”love” is easily found in the possibilities. Russia, Belarus, Ukraine and Kazakhstan are all growing markets with a lot of potential. The so called ”love for the market” might die out when facing the troubles for the first time. With the right consulting partner, it's easier and faster to get into the market. Instead of just telling their customers the facts, Markinvest wants to tell everyone about more wider ideas. Pekka Peltonen is not in this for money, and it can be seen in all the actions his company is doing in the new markets.

Something new for the new markets Internet has been a way of doing business for years. Some might think that the internet is just starting to be a valid possibility in Russia. Those people would be wrong, very wrong. At the moment Russia has the fastest wireless internet connections in the world. Multiple companies are building up their plans for the Russian internet market. What used to be a country for internet pirates has changed into a market for almost all possible new ideas.

companies need to work together. − If we have ten clothing companies offering, as an example, mens, womens and childrens clothing – why not have all of the companies put together. It would form an enourmous selection for the Russian customer. Being able to buy a wide selection of products from the same internet shop is the future in the growing markets. Companies need to understand this possibility. Instead of everyone doing their own internet projects, companies should get together. Pekka Peltonen was involved in the Russian market when Finnish companies were working together for the same goal. Then the western world changed alongside the Russian market. Now everyone is looking the best possible outcome to his own business. This doesn't work so well in the new growing markets.

− Finland should have a better position in Russia now. The companies which got there haven't really been interested to do anything new after getting into the market. We should work to have even more presence in Russia and even more so in the growing markets of Europe and Asia. Pekka Peltonen is doing his share to have more Finnish companies involved in export. Why he keeps doing his work even after the negative experiences? − The Finnish way of life depends on exporting goods and services. We could have a so much better situation already if there would have been more activity and more love for the Russian market. Pekka Peltonen is doing his best to change the world. Luckily he has a lot of customers who are working with him to achieve that goal. www.markinvest.fi

Business Finland 5/2011

finance & investment

− We are doing a lot of work to have internet based businesses running in Russia. My personal goal is to get companies working together for the same goal. If we could get 7-10 companies involved the costs per company would be quite low. With that system we can really have a working internet based sales channel. Pekka Peltonen really gets into the sixth gear, when talking about the new possibilities within the new markets. But are the western companies too late to get into the market? Russian companies are already offering a wide selection of internet based services. However the possiblity lies in the product catalogue. Russia, as other growing markets, tends to favour products from the western world. To really get into the Russian market companies need to offer a wide selection of products. To have that –

Money for nothing and

portfolio managers

Text: Jarkko Repo Photos: OP-Pohjola, iStockPhoto

here was a time when the occasional downward dip was considered an unavoidable part of the nature of investments. Then someone decided unless every figure and chart points upward every second, we have a depression in our hands. Over the last few years, a choir of statisticians, politicians and even some outspoken bankers has been telling us that the world, again, is in the midst of a recession. − In my opinion, there is nothing new under the sun. Cycles come and go, and market fluctuations are part of the picture. Even in periods of normal growth, volatility is not abnormal, even higher volatility. Says Samuli Sipilä, CEO of OP-Fund Management Company. Why should we be listening to him? He controls the investments of over 500.000 Finnish people. With a capital of over 11 billion euros,

Business Finland 5/2011

for free

when it comes to the international market, he is in a position that everyone should be listening to him instead of the doomsday prophets. − It is worrying how people in Finland are becoming less and less sophisticated in basic financial skills like investments and savings. Some 40 or 50 years ago, people were able to assess their own financial position and, for example, calculate interest expenses in a practical way. These days it seems that the youth want to get everything for free and have no interest in personal finances Mr Sipilä has been working in banking for years. Around five years ago, he established and ran OP-Pohjola Group’s private equity fund business, and when that business was sold, he moved into his current position within the Group. − I had to think it through for a long time. I saw many possibilities in collective

investments, but at the same time I also saw a multitude of challenges facing the business. This was actually the main reason that caught my interest and got me into this industry. Even though he had been working in investments for a long time, his new position at the helm of the fund management company posed an entirely new challenge. − The very nature of the business is different when you are managing mutual funds with a large number of very different customers. Also, the legislative and overall control environment of the business is quite different compared to my previous job at the private equity fund. Most common citizens have a Hollywood-style image of bankers – greedy, only thinking about a quick paycheck and so on. Samuli Sipilä does not really fall into that fictitious category.

fi nance & investment

− As I said, Finns would be well-advised to improve their knowledge about personal finances. We need to have a better understanding, as a nation, about the risks and opportunities in investing in different markets. There is a big risk that the current pension system in Finland will be faced with major challenges in the future. People need to consider other possibilities for retirement. One way of solving this could be investing in mutual funds. Samuli Sipilä is doing his best to change the overall image of the investment culture. The high level of his ethics becomes even clearer when discussing OP-Fund Management Company’s investments in Russia.

Russia in the long term OP Fund Management has one of the best mutual funds for the Russian markets. − We have our own tailored strategy for the Russian market. Our aims are set on the long-term there. We do not have as much energy-related investments there as many of our competitors. Our view is that the potential growth in the emerging Russian market can be reached with less risk in other sectors, and we want to be there for a long time. Investing mostly in energy (such as oil) is not in our core strategy. For sure, one could receive high rewards from energy-related bets. However, the flip side is that quite often energy-related investments also involve the greatest risks. Mr Sipilä is also reaching out to engage with more ethical companies and investment strategies. OP-Fund Management was the one of the first in Finland to sign the international United Nations’ initiative for responsible investments. Russia is a fast-growing market with a lot of potential. But the risk is always there. Therefore, those looking for fast profits should look elsewhere. At any rate, when anyone wants to invest in Russia, mutual funds present a very practical and a relatively cost-effective way. Sometimes, people have the conception that mutual funds are an expensive choice. However, it requires a lot of knowledge and time to get the best out of the local market. And ill-advised investments can be much more costly. − Quite often, discussion about mutual funds turns to costs and expenses. Mutual fund expenses are visible due to the fact that our business is extremely regulated and open. It is indeed the openness of the whole business that makes the costs visible, and it is easy to point to costs when criticizing the mutual fund business. Sometimes, however, investors might not realize that the mutual fund provides a lot of other services than just selecting the best potential investments.

Samuli Sipilä, CEO of OP-Fund Management Company

Our view is that the potential growth in the emerging Russian market can be reached with less risk in other sectors, and we want to be there for a long time."

Business Finland 5/2011

fi nance & investment

The Principles for Responsible Investment As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time). We also recognise that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:

1 We will incorporate ESG issues into investment analysis and decision-making processes.

Possible actions: • Include Principles-related requirements in requests for proposals (RFPs) • Align investment mandates, monitoring procedures, performance indicators and incentive structures accordingly (for example, ensure investment management processes reflect long-term time horizons when appropriate) • Communicate ESG expectations to investment service providers • Revisit relationships with service providers that fail to meet ESG expectations • Support the development of tools for benchmarking ESG integration • Support regulatory or policy developments that enable implementation of the Principles

Possible actions: • Address ESG issues in investment policy statements • Support development of ESG-related tools, metrics, and analyses • Assess the capabilities of internal investment managers to incorporate ESG issues • Assess the capabilities of external investment managers to incorporate ESG issues • Ask investment service providers (such as ﬁnancial analysts, consultants, brokers, research firms, or rating companies) to integrate ESG factors into evolving research and analysis • Encourage academic and other research on this theme • Advocate ESG training for investment professionals

5 We will work together to enhance our effectiveness in implementing the Principles.

2 We will be active owners and incorporate ESG issues into our ownership policies and practices.

Possible actions: • Disclose how ESG issues are integrated within investment practices • Disclose active ownership activities (voting, engagement, and/or policy dialogue) • Disclose what is required from service providers in relation to the Principles • Communicate with beneﬁciaries about ESG issues and the Principles • Report on progress and/or achievements relating to the Principles using a 'Comply or Explain'1 approach • Seek to determine the impact of the Principles • Make use of reporting to raise awareness among a broader group of stakeholders

Possible actions: • Develop and disclose an active ownership policy consistent with the Principles • Exercise voting rights or monitor compliance with voting policy (if outsourced) • Develop an engagement capability (either directly or through outsourcing) • Participate in the development of policy, regulation, and standard setting (such as promoting and protecting shareholder rights) • File shareholder resolutions consistent with long-term ESG considerations • Engage with companies on ESG issues • Participate in collaborative engagement initiatives • Ask investment managers to undertake and report on ESG-related engagement

3 We will seek appropriate disclosure on ESG issues by the entities in which we invest. Possible actions: • Ask for standardised reporting on ESG issues (using tools such as the Global Reporting Initiative) • Ask for ESG issues to be integrated within annual ﬁnancial reports • Ask for information from companies regarding adoption of/adherence to relevant norms, standards, codes of conduct or international initiatives (such as the UN Global Compact) • Support shareholder initiatives and resolutions promoting ESG disclosure

4 We will promote acceptance and implementation of the Principles within the investment industry.

Business Finland 5/2011

Possible actions: • Support/participate in networks and information platforms to share tools, pool resources, and make use of investor reporting as a source of learning • Collectively address relevant emerging issues • Develop or support appropriate collaborative initiatives

6 We will each report on our activities and progress towards implementing the Principles.

1 The Comply or Explain approach requires signatories to report on how they implement the Principles, or provide an explanation where they do not comply with them.

The Principles for Responsible Investment were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance issues to investment practices. The process was convened by the United Nations Secretary-General. In signing the Principles, we as investors publicly commit to adopt and implement them, where consistent with our fiduciary responsibilities. We also commit to evaluate the effectiveness and improve the content of the Principles over time. We believe this will improve our ability to meet commitments to beneficiaries as well as better align our investment activities with the broader interests of society.

We encourage other investors to adopt the Principles.

We will always do our best to give the right information to our customers. That is the best way to avoid disappointments."

their share to give the Russian economy a needed boost. Asset managers such as Pohjola Asset Management and OP-Fund Management Company are helping the local companies to get the best out of their business in the long term. When the companies, the investors and the government stand united with the same goal – the development of the market is favourable.

Of risks and men Investing in a growing market is always a risk. Investing in any company is always a risk. These days, even government bond funds have specific risks. − Our customers need to understand the risks involved. No one wants to see the value of his investments decline, but if our customers understand that the market and the potential should be seen in the long-term, like in the case of the Russian Fund, seven years or more, the stress might disappear. But if someone wants to avoid risks at all costs and the investment horizon is short, my advice is to keep the money on bank accounts, for example. Samuli Sipilä is asking for more public understanding about the behavior of the stock markets. Sometimes they will go down, and historically, they have a tendency, to bounce back. − When we are talking with new potential customers, our first aim is to understand what their goals are. What kind of a profit is they are looking for and how much risk they can take. And even more

fi nance & investment

And the customer actually gains a lot by getting into the Russian market through OP Fund Management Company. − Pohjola Asset Management manages the Russian Fund. They are the largest asset management company in Finland and part of the OP-Pohjola Group. They have two portfolio managers based in Helsinki (Finland) and one in Russia to take care of our Russian fund. The investment strategy in Russia is geared towards the long term, and if we see changes that affect the whole market environment in Russia we will be fast to react. The strategy has proven to be a good choice. We are also following the political arena closely to be the first to make changes in our portfolio and strategy if needed. Samuli Sipilä puts a lot of emphasis on ethics when it comes to the companies OP-Fund Management Company funds have invested in. − We are very active in monitoring portfolio companies of our funds. We do our best to have an impact in the extended term. Lately, one concrete aspect we have been asking for in our portfolio companies is to have a more balanced gender distribution on the Board. When it comes to the Russian fund, the strategy is clear. Doing a lot of work with the companies, the portfolio managers are attending to the long-term goals. And obviously, if the fund grows, more resources will be allocated to it. But at the moment, the resources are sufficient, and the fund is running according to the plan. − Why invest in Russia? It is a growing economy with a high level of education. Russia is also very rich in natural resources. Relatively speaking, its economic growth prospects and market valuations present a very solid case. Right now appears to be a very attractive entry point into the market – at least from a historical point of view. Even though the situation in terms of the development of democracy in Russia remains unclear, the recent presidency arrangement creates stability, at least for the medium term. Investment companies are also doing

importantly, what is the investment horizon. Everyone is different and the Russian market might not be for every investor. It is our job to find the right product for our customer. OP-Fund Management Company is constantly searching for new products to offer for the Finnish customer. In the world of Samuli Sipilä, the customer is king. In his position he is looking after the customers benefits but he also takes notes what the competitors are doing. − It seems weird to me personally why some of our competitors have jumped on the bandwagon when it comes to the doomsday views. Most professionals agree with Samuli Sipilä. When the market is going down, it is time to invest. Russia has been going up and down, but looking back on the near history, the valuations are at a rather low level. Maybe you can take the risk, maybe not. Samuli Sipilä and OP-Fund Management are doing their best to give you the best possible fund for the Russian market. Samuli Sipilä had one last thing to say for this article. − We will always do our best to give the right information to our customers. That is the best way to avoid disappointments. Maybe there isn't money for nothing in Russia, but at least one can get the qualified portfolio managers for reasonable costs. Maybe there isn't money for nothing in Russia, but at least one can get the portfolio managers for almost free. n www.op.fi

Business Finland 5/2011

Pohjolan Voima Through Large Investments Towards Low Carbon Energy Production Pohjolan Voima is an energy company that has taken the carbon dioxide challenge in earnest. Since the year 2000 the company has invested four billion euros in carbon dioxide free production.

Text: Klaus Susiluoto Photos: Sini Pennanen, Pohjolan Voima, Kai Tirkkonen, Hannu Vallas

Business Finland 5/2011

Lauri Virkkunen, CEO of Pohjolan Voima Business Finland 5/2011

energy solutions

Balancing Power Needed

Isohaara hydroplant

istorically Pohjolan Voima started as a hydropower company. Like other energy companies, it utilized fossil fuels in the 1960s and 1970s. First oil, and then mainly coal. Nuclear energy came into picture through the ownership in Teollisuuden Voima in the 1970s and 1980s. At the turn of the millennium, Pohjolan Voima launched jointly with its shareholders an extensive construction program of biofuel-fired power plants and contributed to Teollisuuden Voima’s new nuclear power project. The company also built almost 50 MW of wind power. With so varied business approaches

Raasakka hydroplant

Business Finland 5/2011

and large scale power plants, the company is a major backbone of Finnish energy system. “Pohjolan Voima has changed along times. Today there is a permanent trend to reduce carbon dioxide, says CEO of Pohjolan Voima, Mr Lauri Virkkunen. “The share of carbon dioxidefree energy that we produced in 2009 was 70 percent, and it will grow to 90 percent in 2015, according to our estimates. We are the second biggest electricity producer in Finland and a significant company in producing district and industrial heat. Pohjolan Voima's electricity supply covers about 25 per cent of Finnish electricity consumption”

All in all, Pohjolan Voima has 42 power plants in Finland. Varied energy sources are really the cornerstone of business. “We have -for example - built 14 biofuel-fired power plants and the 15th is under construction.” The share of hydropower is still quite high, more than 7 percent. “There is not much potential to grow, but hydropower is an excellent balancing power tool, so we wish that sooner or later new water reservoirs and some smaller upgrade projects could be carried out. “The main reason for this is the increasing need for balancing power that will further boost the interest in hydropower. Pohjolan Voima will continue its ongoing hydropower plant renovation programme, intensify its operations and study the possibilities to increase production. Hydropower is a renewable, OL3 emission-free and cost-effective way of generating electricity. In addition, it is without a doubt the best source of balancing power.” Pohjolan Voima is also strong in developing nuclear power through Teollisuuden Voima, where Pohjolan Voima is the largest shareholder. “So, we also were involved in building two nuclear power reactors in Olkiluoto in the 1980s. Now the company is building the new 1600 MW reactor for the future needs. Nordic electricity market is a good example of co-operation needed.” “We have reliable transfer capacity between Finland and Russia and the capacity between Estonia and Finland as well as between Sweden and Finland will be raised with new links.”

energy solutions

Stable Political Environment In order to carry out larger energy investments the stable and predictable business and political environment is a necessity. “In Finland we had been relatively stable political environment in this issue. With the positive nuclear energy decision of 2010 and the decision to promote renewables the Finnish Parliament made an excellent choice that secures Finland’s self-sufficiency in energy production. The decision also ensures a reasonable price for electricity, and cuts carbon dioxide emissions. “Pohjolan Voima has comprehensive investment plans based on nuclear power and renewable energy. I am happy that this set of plans is now advancing,” says Lauri Virkkunen. One of the new nuclear permits was granted to TVO, where Pohjolan Voima is by far the largest shareholder. Lauri Virkkunen reminds, however, that good national solutions alone are not always enough. “A great deal of energy legislation comes from the EU. One of the topical issues is energy efficiency directive. If you already have made measures, you should not be punished for that. Energy infrastructure issues as well as road maps for the energy future should be studied.”

Ristiina biopower plant

“We do energy policies on practical level, by building carbon dioxide free energy infrastructure. After the OL3 project (the1600 MW reactor in Olkiluoto, West Finland), we plan to continue with OL4. The application of buiding permit will be launched June 2015 at the latest. “The OL 1 and OL 2, built about 30 years ago, are functioning very well. The target is to have 40 years of operating time left. The newest modernization was done during 2010-2011 and cost about 160 million euro.

Reducing Fossil Fuels Radically Pohjolan Voima strongly advocates reducing carbon dioxide emissions with

varied technologies. One interesting project is in Vaskiluoto Vaasa, where the 140 MW biogasification power plant will be connected to the coal-fired power station. “The gasifier will enable the use of wood, agrobiomass and peat as the fuel for the existing coal-fired power plant,” says Lauri Virkkunen. Gas produced from domestic biofuels can replace between 25 and 40 per cent of current coal consumption. This amount is the equivalent of fuel needed for production of district heating and cogenerated electricity. “Similar kinds of solutions could be utilized also elsewhere. Application of gasification technology combined into

OL3

Practical Energy Policies Virkkunen reminds that as important as climate change prevention measures are, other viewpoints such as competiveness, availability of energy sources and environmental effects must be taken into account.

Business Finland 5/2011

energy solutions coal dust burning enables relatively inexpensive and fast introduction of bioenergy to power plants where coal is still used. And these kinds of plants are many, as Finnish Ministry of Employment and the Economy reminded,” says Virkkunen. Another example of replacing fossil fuels comes from the future biopower

Hämeenkyrö biopower plant

Business Finland 5/2011

plant in Hämeenkyrö, which will replace energy production based on natural gas. The new biopower plant increases the use of Finnish energy sources in the region. The fuels to be used in the new plant include wood chips and other wood-based fuels, as well as peat as an auxiliary fuel. Virkkunen believes that different mul-

ti-fuel solutions will become more common in the future. Finland has strong expertise in CHP technology – combined heat and power. “This expertise could be exported more than what happens today. Actually Finland has expertise in many energy technology solutions.”

energy solutions

CARBON NEUTRAL ELECTRICITY AND DEISTRICT HEAT 2050 Mr Virkkunen is also the Chairman of the Finnish Energy Industries. The Finnish Energy Industries (ET) is a sector organisation for the industrial and labour market policy of the energy sector. It represents companies that produce, acquire, transmit and sell electricity, district heat and district cooling and offer related services. The Finnish energy industries have a carbon neutral vision for electricity and district heat for 2050. The vision seeks, on the one hand, electricity and heat production that produces as few emissions as possible and, on the other hand, replacing the use of fossil fuels with electricity and district heat in housing, transport and industry. The actions are also always examined from the aspects of well-being and competitiveness, as well as domestic content and security of supplies. The Finnish Energy Industries also has a presence in Brussels. The office in Brussels has a vantage point for following the EU decision-making and creating co-operation networks. It gathers information on the subject and sends it on to Finland. In Brussels, the Finnish Energy Industries cooperates with the electric industry organisation, Eurelectric; the district heating industry organisation, Euroheat & Power; and the nuclear energy industry organisation Foratom. Approximately 60 people from the Finnish Energy Industries’ member companies and offices take part in the committees and working groups of the European sector organisations.

POHJOLAN VOIMA Pohjolan Voima is a privately owned group of companies producing electricity and heat for its shareholders on a large scale in Finland. The company was established in 1943. The company’s founders needed electricity for their operations, but none of the shareholders could alone cover the extensive costs involved in the construction of power plants: a decision was taken to centralize the production of energy and to share the costs. In the beginning, Pohjolan Voima built hydropower plants. Pohjolan Voima’s founder shareholders were Finnish forest industry companies. Later on, municipal energy utilities and companies as well as other industries became owners as well.

www.pohjolanvoima.fi

Business Finland 5/2011

cutting edge solutions

Text: Jarkko Repo Photos: Keraplast

Light and air from Keraplast

Keraplast is a family company from Orimattila, Finland. The company grew fast during the 90's when others were still afraid to take risks. Buying competitors, working closely with resellers and by putting money into research has made it possible to grow on domestic market. When a company has a marketshare of approx. 75% it's time to go abroad.

Business Finland 5/2011

industrial innovations

Russia was the obvious market, as there were no local competitors for Keraplast. Where to grow depends of the product catalog. It is also vital to know the local laws and the business methods before risking too much. Russia was and is an excellent market for Keraplast. To understand how Keraplast got where it is, we have to take a look at the products and the past."

Keraplast has two production facilities in Orimattila, Finland. In this picture the new Oriville factory which was completed in 2001 and modernized for the companies 40 year celebration in 2010.

Business Finland 5/2011

industrial innovations Solution which has two control systems for smoke ventilation and one control panel.

Glass smoke ventilation hatch in LIDL's central warehouse in Janakkala

Business Finland 5/2011

industrial innovations

- Pyramid model light domes, Päijät-Häme regions central hospital

- Light domes at Merlon's factory in St. Petersburg

www.keraplast.ﬁ

Business Finland 5/2011

The Hotel Haikko Manor, spa and conference center is a fascinating combination of history, elegance and modern hotel, restaurant and spa facilities. With its unique location by the sea and in the middle of a beautiful park, it offers a wide range of services. Many Russians have found this peaceful place, which has connections also to the Romanov dynasty.

Romanticism of Haikko Manor Appeals to Russians H

OTEL HAIKKO MANOR is located in the idyllic town of Porvoo, about 50 km from Helsinki and a little more than 300 km from St. Petersburg. The Managing Director and main owner of the Hotel Haikko Manor, Mr. Veikko Vuoristo, tells that Russians are the sec-

Business Finland 5/2011

ond biggest customer group for the hotel, right after Finns. â&#x20AC;&#x153;Every year thousands of Russians visit Haikko. They find our manor hotel a romantic venue. We have many Russian wedding couples, and the weddings they arrange are usually quite large, with 100200 guests. Most of them are Russians liv-

ing in Finland, but many guests naturally come from Russia. It is quite common to spend the wedding night at Haikko.â&#x20AC;? Wedding-related services are just one part of the strategy to attract even more Russians. â&#x20AC;&#x153;Mostly Russians come through the travel agency, but many come individually. Some have found Haikko by using

Business Finland 5/2011

travel destinations

Google. Our own webpages are in Russian, and they can do reservation directly through these new pages,” says Vuoristo. “We also have Russian-speaking personnel in every work shift.” Russians stay at Haikko for an average of four nights, which is longer than most other nationals.

“Many Russians stay at Haikko for one week, sometimes even two weeks.”

Leisure Activities There is much to do at Haikko. “We offer fishing and boat cruises through the unique archipelago. You

Every year thousands of Russians visit Haikko. They find our manor hotel a romantic venue...

Business Finland 5/2011

can enjoy private saunas by the sea with buffet style evening meal in a cozy sauna lounge or taste wine and chocolate in our beautiful manor. Or pamper yourself and take some of our various Spa treatments. “We have eight saunas, four of which are on the seaside. The log sauna dates back to 1966. There are also a sauna called meeting sauna and a steam sauna in spa. “Naturally many also want to go to Helsinki for shopping. Russians like to do shopping at Itäkeskus shopping center, one of the largest in North Europe. Or our guests can go to near-by Porvoo to enjoy the special cultural and historical atmosphere there.” The Premier Park is also close-by. It is a center for improving one’s driving skills, whether you are a professional driver or

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an enthusiast. Especially winter driving courses have been popular. Snow mobile safaris are possible. Ice-fishing with nets under the ice is an unforgettable experience. “Golf is also one option. There are four golf courses with which we cooperate. Kulloo, Nevas, Talma and Porvoo Golf will ensure you the right kind of course you like. We have our own golf share in all the clubs, so it is actually cheaper for our customers to do a round there. “We have certain tailor-made packages for Russians, for example, New Year’s package.”

Ice-fishing with nets under the ice is an unforgettable experience."

Business Finland 5/2011

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Award-winning Congress Hotel Veikko Vuoristo emphasizes that Russians by no means come only for leisure and shopping. “Some Moscow-based banks have used our meeting services. I believe we will see more Russian conference guests and incentive groups of firms. “The number of conference guests went down during the 2008-2009 recession, but at the same time the turnover of spa services increased. This year has been rather good for us.” Haikko is indeed Finland’s awardwinning congress hotel. Flexible meeting facilities can accommodate up to 400 participants in Congress Center and Villa Haikko, with the latest AV equipment, inspiring environment, friendly and motivated staff, peaceful and well-appointed guestrooms, versatile spa and leisure activities. “Leisure and work often go hand in hand. After daytime meetings one can enjoy, for example, luxurious facial and body treatments in the elegant Beauty Center. One can try the relaxing whole body massage in Wellness Center.

“Haikko Spa center also has a cold room. You can feel an extreme freezing experience: degrees drop to minus 110 Celcius. Afterwards you will definitely enjoy the warm Yorokobi Wellness pools and saunas.” Spa at Haikko is not any kind of water parks, which are misleadingly called spas. “We have tried to keep our spa department small but with the highest-class services. “We did not invest that much in children’s facilities. Naturally children are welcome, but this is a place mainly for grown-ups.”

I believe we will see more Russian conference guests and incentive groups of firms. 72

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Rolls Royce at Your Service We have two large dining rooms, each for 150 persons. The evening restaurant can seat 120 people. In the summer time terraces are in use, and tents are an option. “The largest occasion we have had consisted of 1500 people, when IBM staff was here. Not all of them naturally stayed overnight, but we can accommodate about 400 persons in the manor house and spa hotel. “Another mega event was the wedding of Formula One driver Mika Häkkinen. The whole McLaren team was here. It was a marvelous three-day event.” “We have a helicopter field of our own. It is mostly used by Finnish businessmen. In the summer time there can be several flights a week. Charter boats are an option for rent to get to know Porvoo archipelago or go even further. We have a 1963 Rolls Royce Silver Cloud 3, bought from Finland.”

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Classic Kitchen, French Wines The Hotel Haikko Manor is known also for its excellent cuisine. Villa Haikko’s historic main building has two large restaurants plus several attractive cabins. The “archipelago villa” on the seaside is for private occasions. “You can build a menu for your guests with our kitchen experts. Especially weddings are popular in this romantic villa.” “Our cuisine is quite classic, and in wines France offers the largest selection. We have famous Chateua Petrus, many of which cost hundreds of euros a bottle. These are mature wines, more than 30 years old. It is only old Bordeauxs which are ageing so well. “We also have other renowned wines, and our wine list is one of the best in Finland. “One of our strengths is that with whatever service, we have more staff than other service providers. This holds true especially in kitchen and in restaurants.”

www.haikko.ﬁ

THE ROMANOV CONNECTION There has been a manor house in Haikko for at least 650 years. The recent one was erected in the 1910s after the fire destroyed the old one in the New Year’s night in 1911. Since the 19th century the Haikko Manor had several interesting connections to the House of Romanovs. The von Etter family owned the Haikko at that time. Sebastian von Etter was the Commander of Czars Lifeguard, which was the reason he had good contacts with the Romanov dynasty. Grand Duke Cyril came to Porvoo in 1917 with his wife Victoria. Their son Vladimir was born in Porvoo in August 1917. He was baptized at Haikko Manor. The family with this son and two daughters lived in Finland, after which they moved to Coburg, Germany and then to France. Vladimir Kirillovich, the heir to the throne after his father’s death, lived in France, studied in England, lived then in Germany, Austria, Spain and again in France in the town Saint-Briac in Brittany. Vladimir was able to visit Russia only once, in November 1991 when he was invited to visit St. Petersburg by its Mayor Anatoly Sobchak.

Business Finland 5/2011

travel destinations We have also tailor-made certain packages for Russians, for example New Yearâ&#x20AC;&#x2122;s package."

Business Finland 5/2011

business & administration

Holiday club

Vesa Tengman, CEO, Holiday Club Resorts Oy

Business Finland 5/2011

Holiday Club Saimaa

Text: Klaus Susiluoto Photos: Holiday Club

business & administration

Finnish resort just next to Russia

Holiday Club Saimaa is a perfect location for many different events."

Business Finland 5/2011

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new resort will be opened for all kinds of travellers on 11th of November 2011. Families, companies and various kinds of culture events are welcome in Holiday Club Saimaa. An international resort for everyone, located in Finland just next to the Russian border. − Our expectations is that near 40% of all guests will be from Russia Says Marko Hiltunen, Marketing Di-

Business Finland 5/2011

rector of Holiday Club Saimaa. − We have already lots of bookings from around the world. We've also sold most of the villas from the area. It seems that the market has been waiting for a resort like Holiday Club Saimaa. But it's not really a new location. Rauha -hotell and spa was opened back in 1894 in the area by Gustav Almin. A Russian born doctor Dimitri Gabrilovitsch bought the area in 1912 to change

it into a sanitarium. The spa building burnt in 1923 and was then sold to be a regional hospital. The hospital was closed in 2000. Now the area goes back to it's roots when the Holiday Club Saimaa is opened. The area is located by the largest lake in Finland – Saimaa. The breathtaking nature is the key to the areas success. The new Saimaa Gardens area contains the original Rauha -buildings and even a part

Holiday Club Saimaa is a beautiful spa hotel with 221 rooms, a unique luxury spa, ice arena and restaurants. All rooms in the spa hotel are non-smoking. Most rooms also have a balcony with an amazing view over Saimaa or the spa grounds. The rooms of the spa hotel Holiday Club Saimaa are situated in three separate hotel wings, each with their own unique atmosphere. You may choose to stay in the Castle Hotel – an old renovated hospital building from the 1920s, the intimate Gant Hotel, or the family-friendly, spacious Club Saimaa Hotel. From all the rooms, our guests have direct indoor access to the spa, restaurants and all available indoor activities. Simply dress up or put your trainers on and go and enjoy yourself.

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Accommodation

Club Saimaa hotel, 137 spacious rooms. The rooms can accommodate up to 4 adults, or 2 adults and 2 children. Some of Club Saimaa’s rooms have their own, spacious balcony and others have a French balcony. The rooms are equipped with amenities such as a large flat-screen TV, refrigerator and bathrobes. The beds can easily be moved together or separated.

The Castle hotel with 63 peaceful and romantic rooms You have a stunning view over Lake Saimaa from the balconies of the top floors. At the Castle Hotel, you can enjoy breakfast in a dedicated, beautiful breakfast room. The Castle Hotel’s own library offers quality reading time with its selection of books. You can enjoy coffee and tea at the library whenever it suits you best, regardless the time of day. The rooms are equipped with luxurious bathrobes and slippers. The basement of the Castle Hotel also offers hobby facilities featuring guided activities.

of the Masteensaari -island. Which started as a smallish hotel and spa has turned into a large resort. The new spa has 221 rooms, with all kinds of various services. There are also going to be built around 300 cottages and an fullscale golf field right next to the spa. Castle -hotel has 63 rooms for more romantic and personal travelling. And there's also Gant -hotel with 21 spaceous and luxuries rooms.

The Gant hotel with 21 spacious luxury rooms. In the spacious, stylish rooms of the Gant hotel, you can enjoy luxury and quality. All the linen in the rooms is from Gant, down to the last detail. In the same wing of the Gant Hotel, you can pamper yourself with luxurious treatments from the Harmony Spa or do some shopping in the Gant shop, offering many other Gant products in addition to the linen used in the rooms. Apartments and holiday homes Also under construction in the Holiday Club Saimaa premises are Holiday Club Villas apartments and holiday homes, built with the latest technology to meet modern demands for energy efficiency and environmental friendliness.

Business Finland 5/2011

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Activities in Holiday Club Saimaa People are constantly looking for more activities. Even thou the region offers a superb environment for hiking and such outdoor activities â&#x20AC;&#x201C; Holiday Club Saimaa has put a lot of effort into other kinds of activities also.

An active holiday in Saimaa Pristine nature offers wonderful recreational opportunities. The enormous Saimaa lake district creates opportunities for varied hobbies and recreational activities. The centre, surrounded by the largest unified lake area in Europe, offers unique conditions for moving in nature. The water system consisting of over 120 lakes and 14,000 islands creates an exceptional passageway, and you can also enter the area over water from the Gulf of Finland through the Saimaa canal. A golf course will also be completed in the area in the summer of 2012. A wide selection of gym equipment and guided group exercise are available in the basement of the Castle hotel. After a hard day, sports such as bowling, skating and badminton help you unwind. The guided lessons are available in our weekly programme. Personal trainer services, such as fitness testing, gym guidance and diet advice are available by reservation. Reservations: harraste.saimaa@holidayclub.fi Our NHL ice arena hosts both ice hockey matches at national league level and figure skating events. Activities of different types are arranged on the ice, from skating schools to ice dancing. Skates and equipment are available for rent. Ball games: Bowling, cosmic bowling, pool, water games, badminton, and starting in summer 2012, golf, badell and minigolf. Outdoor activities: Nordic walking, skiing, fishing, boating, outdoor exercise and jogging. Children's World is located in the basement of the Castle hotel. Miniature kitchen, baby nursery and a crafts and play room. The Kid's World offers new experiences to the smallest members of the family; cooking, doing tricks, climbing or even singing karaoke; the hotel provides the childminders. Children also have their own activities in the weekly programme. Many activities from go-karting to horseback riding are available near the hotel.

Business Finland 5/2011

Wellness section Harmony Spa The Harmony Spa is located in the basement of the Gant Hotel. The spa has several treatment rooms and a steam sauna, amongst other things.

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And when one has used the offered activities it might a good time to visit the spa and after that eat at the one of the restaurants.

Holiday Club Saimaa's Harmony Spa offers pampering treatments and well-being for the body and mind, every day of the week. We use high-quality products to guarantee optimum relaxation and treatments. FANTASTIC PAMPERING TREATMENTS: Oriental treatments from Thann, pampering luxury treatments and beautician services from Decleor. High-quality hand, feet and nail treatments from OPI. Break away from everyday life in the relaxation rooms and the champagne bar. The Home Shop offers brand name products from Gant, allowing you to buy high-quality care products to use at home. CHAMPAGNE BAR: Kick back and enjoy real champagne. THANN: The products in the care range utilise nature's own raw materials, such as first-class essential oils and vegetable extracts. The treatments are based on oriental wellness treatments. Each product has its own unique effect on the wellbeing of body and soul. The products do not contain artificial perfumes and are not tested on animals. DECLĂ&#x2030;OR: The expert in cosmetic aromatherapy allows you to be in harmony with yourself and the environment, and lets your skin radiate a natural beauty. The treatments combine aromatherapy with old oriental traditions, such as shiatsu massage and acupressure. The 100% pure essential oils contain no preservatives or colours, nor artificial perfumes. Not tested on animals. O.P.I : The high-quality product selection includes beautiful nail polishes and deliciously scented hand- and feet treatment products. These wonderful pampering treatments differ from traditional pedicures by their luxurious scents and effective treatment products. GANT SHOP: Gant's products are known for their high quality. Gant Home's products are pleasing to the designer's eye, while Gant Clothes represent American simplicity and European style, whilst offering outstanding quality.

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Business Finland 5/2011

Le Biff A Jospers charcoal grill ensures juicy steaks and charcoal aromas; the delicious flavours are complemented by food from local suppliers and a comprehensive wine list. Warm à la carte restaurant with different knives to suit the steaks.

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Restaurants

Easy Kitchen Stop by for a quick lunch or enjoy a peaceful dinner - choose from our wide selection of treats or enjoy a main course cooked “à la minute” in the open kitchen. Our selection offers sweet and savoury pastry products to enjoy in the restaurant or to take away.

O'Learys This Boston-style sports bar is a real Event Bar. 47 television screens allow you to watch Grand Prix racing, football or ice hockey or even the Eurovision song contest. You can also have your own song contest in the separate karaoke corner. Or spend your evening playing pool and other games. The menu has burgers, ribs and other Boston delicacies, with a wide selection of beers and drinks to go with them. Read more: www.olearys.fi

Arena This ice arena that also functions as a multi-purpose hall provides excellent surroundings for many type of festivities, from cocktail parties to larger dinners under crystal chandeliers. Arena has many uses: gala dinners, trade fairs, concerts, or even sporting events.

Lounge Minicocktails are the speciality of our cocktail bar located near the reception. Sit down for a while, or stay for longer and read the daily papers and enjoy a refreshing espresso, for example.

Beatles Bar The laid-back Beatles Bar is open near the bowling alley and spa departments, and you are welcome to spend your time there and enjoy one of our delicious ice cream portions. For a savoury snack, try our Hot Dogs.

Business Finland 5/2011

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− Holiday Club Saimaa is a perfect location for many different events. More will be offered but at the moment but right now we can tell our customers of the following events which will take place in our resort.

Grand Opening The two day Grand Opening of Holiday Club Saimaa is celebrated 11.-12.11.2011 with Finnish top artists. You will be entertained by such artists as Eppu Normaali, Osmo’s Cosmos, Anna Abreu and Popeda.

Pre-Christmas Party Pre-Christmas party is held at Holiday Club Saimaa 25th of November 2011 with delicious food and great music. Artists: Anna Eriksson, Aikakone and Jari Sillanpää. You can have a delicious pre-Christmas meal at our Restaurant World. Age limit 20 years.

Russian style New Year Have a relaxing and entertaining New Year at the luxurious and versatile Holiday Club Saimaa. Enjoy our spa, wellness treatments and activities. The past year will end at the Grand New Year Gala at the Holiday Club Arena 31st of December. Arena will be full of circus performers, musicians, magicians and a magnificent Gala Dinner is served.

Business Finland 5/2011

Resorts must offer a wide variety of services to gain the attention of business travellers. Holiday Club Saimaa has been planned to offer the best no matter what is your reason for staying there.

For business Holiday Club Saimaa offers conference services. − We are the largest, most diverse and newest holiday destination is Nordic countries offering multiple choices for accommodation in a unique milieu. It's not just the accommodation, they are also offering a high level conference wing for their business customers.

Holiday Club Saimaa has its own conference wing on the entry floor of the spa building. You can arrange meetings for many different purposes and different groups. • Meeting room Saimaa (106 m2), approx. 66 persons • Meeting room Tampere (50 m2), approx. 30 persons • Meeting room Saariselkä (59 m2), approx. 36 persons • Meeting room Kuusamo (60 m2), approx. 36 persons • Meeting room Åre (80 m2), approx. 50 persons • Meeting room Katinkulta (80 m2), approx. 50 persons • Holiday Club Arena, up to 1,750 persons.

One-day conference package includes morning coffee at the coffee market, conference lunch with table service in the Easy Kitchen restaurant, coffee dessert and afternoon coffee at the coffee market. Meeting room rental is included in the package price.

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Conference packages

Two-day conference package includes 2 x morning coffee at the coffee market, 2 x conference lunch with table service in the Easy Kitchen restaurant, 2 x coffee dessert and 2 x afternoon coffee at the coffee market. Meeting room rental is included in the package price. Or why not have an effective morning meeting while enjoying a healthy Holiday Club breakfast which is sure to take you well into the afternoon?

All the offered services and activities are of course also offered to the conference guests. Holiday Club Saimaa is a perfect location for all kinds of business activities. From conferences to WHP -days (Workplace Health Promotion) â&#x20AC;&#x201C; Holiday Club Saimaa is the perfect choice. www.holidayclubresorts.com/resorts/saimaa

Business Finland 5/2011

The future of

Pyhäsalmi Small town of Pyhäjärvi, with a population of under 6000, is one of the most international areas in northern Finland. Mining industry changed the area and now Pyhäjärvi is taking it's next step. The old mines are used for scientific research and the area is also planning for an even better future.

yhäjärvi has a history in international cooperations. Local people and also the city council are extremely positive concerning the possibilities of international research being done in Py-

häjärvi. When mining started in Pyhäjärvi, around 50 years ago, the area actually had a higher population. Typically small Finnish towns have faded away as farming has not been profitable enough to give a living for everyone. Rural areas are left behind and population has moved into larger cities. Pyhäjärvi has been able to stay alive, partly due to the mining industry but even more so due to the local attitude. Currently the Pyhäsalmi mine is one of the most modern mines around the world. It is also the deepest in Europe, reaching around 1,4 kilometres (0,87 miles). This information is crucial for the future of Pyhäjärvi.

Business Finland 5/2011

pyhäsalmi

In 2008 Pyhäjärvi received it's first international research equipments from Russia. Together with the universities of Jyväskylä and Oulu (both from Finland) Pyhäjärvi region started it's journey into an international site for high quality research. EMMA (Experiment with MultiMuon Array) has now been running for few years and the experiment has been a success. Feedback from everywhere has been positive. The key issue has been the local attitude for such activities which has helped the scientists to get their job done. The Pyhäsalmi mine, owned by Inmet Mining Corporation, is scheduled to be closed in 2018. The earth riches, copper and sinc, has never been the only plan for the small town. However closing of the

mine will be a set back for the area. Currently the mine has over 200 employees and the Inmet Mining Corporation is an important employer in the region. Pyhäjärvi has been able to be an active small town in northern Finland but to keep it's area alive, it had to change from a mining town to an site of international research and an interesting tourism area.

The next step Mayor of Pyhäjärvi, Tita Rinnevaara, says The possible LAGUNA project would be a great step for our community. The LAGUNA (Large Apparatus studying Grand Unification, Neutrino Astrophysics) is a project lead by universities

from Finland. The project is planned for the requirements of CERN (European laboratory for particle physics). Currently there are seven different locations which are possible sites for the LAGUNA, Pyhäsalmi mine in Pyhäjärvi being one of them. The final location will be decided earliest in 2013, probably in 2014 Rinnevaara continued If Pyhäjärvi is chosen as the location, it would be beneficial for our town. Around 50 to 100 scientists would be living in the area. And the building of the research center would take approx. 10 years creating a need of 2800 man-years Concerning the possibilities and the current situation, LAGUNA would be ideal for Pyhäjärvi. But it's not just Py-

Business Finland 5/2011

häjärvi which has something to gain here, also the LAGUNA project would benefit from Pyhäjärvi. Pyhäsalmi mine is located exceptionally well from CERN. In one of the studies particles will be sent from CERN to LAGUNA. The distance from CERN to Pyhäsalmi mine is perfect for the planned research. Pyhäsalmi mine, from all of the possible sites, has the lowest reactor neutrino background, which is crucial for the research. Also the depth of the mine and the overall quality is superb for LAGUNA. Even more reasons are coming up monthly and also the current owner of the mine has signed the memorandum of understanding concerning LAGUNA. LAGUNA would be perfect for the town of Pyhäjärvi and in comparison to other possible sites, Pyhäsalmi mine is currently the best location. As the funding of LAGUNA project is not from EU the decision making will be free of politics thus giving the Pyhäjärvi even better standing in the race for the new research center. Even more so, the local attitude is open and the mayor is doing her best to change Pyhäjärvi from a mining community to an international research area. The first steps have been taken. In few years Pyhäjärvi will most likely be an active research area but also an attraction for tourists.

Business Finland 5/2011

One business opportunity As Pyhäjärvi is going through a transition from a mining town to something else, so are the local entrepreneurs. Business Finland interviewed the owner, Valto Perälä, of Hotel Pyhäsalmi. Our business model has been built upon various kinds of travellers. The mine has given us a lot of customers but our reputation has given us the possibility to do business even if the mine was closed.

Hotel Pyhäsalmi is located right in the downtown of Pyhäjärvi. The hotel has 33 rooms and one suite. Small family owned company has been profitable for over twenty years. Currently the business is running smoothly and without any debts. However – changes are looming even around Hotel Pyhäjärvi. We (owners Valto Perälä and his wife) are getting older and planning our retirement. So for the last few years we have planned and are now getting ready to sell the hotel.

pyhäsalmi

Valto Perälä, Owner of the Hotel Pyhäsalmi.

The location for Hotel Pyhäsalmi is excellent as it's just in the middle of Finland. So tourists from southern Finland on their way to Lapland are staying in the Hotel Pyhäsalmi. But they have also built the hotel for the needs of the mining industry. We have negotiation and conference rooms for 100 persons with the latest technology. When asked about the future concerning the possibilities of LAGUNA Valto Perälä comments. As we have planned to retire and sell the hotel we have decided to throw theball to the successor. Local companies must develop services further to meet the upcoming requirements. Our problem has been that we are not fluent in foreign languages. The pioneers will get an advantage as we got when we established the hotel over 25 years ago. Pyhäjärvi is also going through changes. The future is still open, but that's the time when the risk takers are active. And what comes to the Hotel Pyhäsalmi, there really even isn't a risk factor involved. But if someone wants to be ahead of others – now is the right time. n www.pyhajarvi.fi

The company is being sold by a respected broker company Procap. Questions concerning Hotel Pyhäsalmi can be directed to Mr. Kimmo Heinonen (kimmo.heinonen@procap.fi).

Business Finland 5/2011

Vivago 90

Business Finland 5/2011

Exporting wellbeing

Our quality has been noticed over the borders."

Text: Simo Raittila Photos: Vivago

Finland is a country known for its welfare and innovation-friendly atmosphere. Now the ageing baby boomer generation can rely on the pioneering technological solutions created by Vivago.

ivago is a Finnish company that develops automatic personal security systems for monitoring and analysing users’ vitality, activity and sleep. For countries with ageing populations, the wellbeing watch is nothing short of a miracle. Vivago estimates that it allows elderly people to spend approximately one year longer at home, and this could save about EUR 40,000 of public money per watch each year. It also gives people the opportunity to retire and live at home. This means that costs can be cut in an ethical manner. “It takes only 7.7 days for our product to pay for itself,” says Vivago president Katja Kääriä. The company's watch is the only one of its kind that offers an automatic alarm for situations when the user is unable to call for help or press a distress signal.

Vivago Active Ultra PC • Helps in maintaining a healthy lifestyle answers the following questions: – How active have I been? Change in my activity level? – How much calories have I burnt? – How much have I slept? My sleep quality?

Business Finland 5/2011

cutting edge solutions

Vivago Care 1) Manual alarms • The user can always call for help by pressing the button on the wrist unit.

2) Automatic alarms • "Wrist unit off wrist" and "Wrist unit back on wrist" notifications ensure that the unit is in use and that the user is supported by the unit´s security features. • Alarms based on changes in activity levels alert carers to unusual periods of immobility or the user´s prolonged passivity. • With a device interface, a discreet access control solution can be implemented even at home. The system then provides "At home" and "Out" notifications. • Automatic technical alarms on, for example, low batteries or radio transmission problems.

Over the borders Most of Vivago's turnover comes from outside Finland; Kääriä estimates around 70-80 percent of it comes from exports. France, Germany and Italy have shown the most interest in the company's products. “We have a magnificent product on our hands,” says Kääriä. “It really enhances people's quality of life and we want to spread it as widely as possible.” Vivago works closely with professionals in elderly care, independent and private actors, to find the best solutions. Ernst & Young named the SOPHIA concept, which uses Vivago products, as one of the top 10 business practices in the world for enabling cost-efficient health and social care. The concept is an innovative, customer-oriented teleservice for the elderly, which supports longer independent living. The system has over 2,000 users in Germany. “We wish to be seen more as an enabler of better services than as just another product on the market,” says Kääriä.

Vivago Active Sleep

Business Finland 5/2011

• Give you greater health and fitness awareness, including sleep pattern and exercise levels • Help exploit overall well-being • Safeguard you against long-term health issues

We at Vivago want to help you to take better care of yourself."

Vivago and its brands are reliable and good quality. The company always bases its products on theoretical and empirically tested science, but there is always room for improvement. “Even though the products are already approachable, we're going to make them even easier to use,” says Kääriä. “Making the watch smaller and more resemblant to basic watches will increase its usability and desirability.” The company will also develop its software and algorithms, so that in the future customers can have even more information at their disposal to take care of their own wellbeing. n

Vivago Care 8001

cutting edge solutions

Looking to the future

• Continuously measures your activity • Automatic alarms: Vivago Care can call for help even when you are not able to do so • Creates wellbeing data 24/7 to enable preventive healthcare

Vivago Tel. +358 9 2709 1710 info@vivago.fi www.vivago.fi

Business Finland 5/2011

CBU Text: Jarkko Repo Photos: CBU

The Finnish-Russian Cross-Border University (CBU) is the result of cooperation of ten universities in Russia and Finland, with international joint Masterâ&#x20AC;&#x2122;s degree programmes currently in five study fields.

Five study fields in CBU Business and Administration, Forestry and Environmental Engineering, Information and Communications Technology, International Relations and Public Health.

Business Finland 5/2011

education & knowledge

Partner universities The University of Helsinki, The University of Eastern Finland, Lappeenranta University of Technology, The University of Tampere, St. Petersburg State University, St. Petersburg State Polytechnical University, St. Petersburg State Forest Technical University, Moscow State Forest University, Petrozavodsk State University, and the European University at St. Petersburg. Dr. Liisa Tahvanainen, Director of the CBU consortium

he funding of the CBU has become from The Finnish Ministry for Foreign Affairs and Ministry of Education and Culture and the Russian Ministry of Education and Science, as well as from the partner universities. The CBU Development Unit (DU), located at the University of Eastern Finland as an independent institute, serves as the administrative unit of the CBU. The individual Master’s programmes are coordinated by a Finnish university. The Master’s programmes started in the autumn 2007 having currently 375 students from 31 countries. The first 28 students were graduated during 2009-2010. Joint Doctoral programmes have been developed in the CBU since late 2008 and stakeholder cooperation since 2009. During 2010 the first 9 doctoral students among the CBU graduates were selected to continue their studies within CBU doctoral programs. Three of the programmes issue a double degree currently, the other programmes issue a national degree. The aim is that soon all Master’s programmes will be double degree programmes. The studies follow the Bologna process consisting of approximately two years of studies. The CBU also issues a special certificate about the cross-border studies. A doctoral degree is possible in cooperation with existing graduate schools.

− For students it is interesting and useful to get a double degree from Russia and a European country. This will broaden the job market and open up career possibilities in the whole Europe and Russia. In the future, a single national diploma and a domestic perspective and experience will not be enough to satisfy the needs of the society and labor market. Already today, the most competent graduates are those with international expertise. Said Dr. Liisa Tahvanainen, Director of the CBU consortium. Her opinion concerning the reasons for someone to study in CBU were clear.

Why companies should be interested in the CBU The CBU produces graduates with special skills and understanding for acting across national boundaries in international and multi-cultural environment: • Subject specific expertise • Research skills and creativity • Capacity for analyses and synthesis • Ability to integrate knowledge and handle complexity • Internationalization • Problem solving and decision making in international environment • Understanding of social and ethical responsibilities • Knowledge of and respect for other cultures

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education & knowledge

− The CBU offers studies in a multicultural environment in Finland and Russia, including a mobility period of at least one semester in the other country. The programmes emphasize the needs of the working life and internationality. The international studies and experience make the graduates wanted by companies. Many students are hired by Russian companies even before graduation. The students further can build a global network which can be utilised later in the working life.

Personal views into education Liisa Tahvanainen gave many reasons why she is involved within the CBU, not just because of his competence, but because of the future. − My education is in forestry, doctor in Forest Sciences, specialized to wood energy and rural development in my own studies. I also hold Adjunct Professor position in wood energy production at the School of Forestry (UEF). As energy questions are crucially important globally - not only because of growing energy demand but also because of increasingly scarce fossil fuel sources, effects on climate change and through that the growing importance of bioeconomy in the world – also my interest has always been on international aspects. During this decade international education and training has had increasingly important role in my career. Developing new things has always fascinated me and I started

Bologna Process The purpose of the Bologna Process (or Bologna Accords) is the creation of the European Higher Education Area by making academic degree standards and quality assurance standards more comparable and compatible throughout Europe, in particular under the Lisbon Recognition Convention.

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SPSPU building with the team developing international forestry programmes. Furthermore, I got then the change to develop cross-border Master’s programme in Forestry and Environmental Engineering when CBU was first launched in 2005. In those days joint international degree programmes were new things in Finland and generally in Europe, so the work was very challenging as the educational systems in different countries were quite different. Thanks to the Bologna Process the work is much easier today and especially the Erasmus Mundus programme in Europe has played a major role boosting the higher educational systems towards more unified structures. − I started as Director of CBU in 2006 as I had already lot of experience how to develop joint curricula, double degrees and multi-cultural teams. The most fascinating thing in CBU is that it provides the students a unique change to study not only in EU but also in Russia in English and find out the terribly big amount of research and academic knowledge which has been available this far only in Russian language. Liisa Tahvanainen is working together with Eero Forss, Vice Director of the CBU. Tahvanainen is mostly involved with the rectors of all the participating universities supervising the work. − Today CBU is part of my duties at the university administration, where I am Director of International Relations,

in charge of International Education and Marketing. In CBU headquarters marketing secretary Irina Kryukova is in charge of marketing and corporate cooperation of the CBU, she can be met in major educational fares in Russia and elsewhere – or contacted through our web-pages.

CBU is a very international system. − CBU has been very international from the beginning what comes to students. We have students from more than 30 countries and all parts of the world. But of course, we have many students from Finland and Russia. The idea is to provide students innovative and multicultural study environment, training them to work together with people coming from different backgrounds with different values and ideas. Multicultural skills and global views are increasingly important for any job in the future. The key in the CBU is especially to provide students such skills that are relevant concerning the growing cooperation between Russia and EU in all sectors of business, policy, research etc. Studies include always modules both in Russia and in Finland. The programmes are also targeting towards double degrees, one from Finland and one from Russia, to provide the graduates but also the companies proof of the quality and validity of the education.

education & knowledge

Views into the Russian education Liisa Tahvanainen told few reasons why Russia and Finland were selected as the locations for the CBU. − Russia (and earlier the Soviet Union) and Finland have long history in academic cooperation and business. The CBU brings together the highly qualified universities in both countries, combining their special expertise into a high quality education. Due to the long border and good relationships, mobility and interaction of people is easy and every day. Finland offers a natural gateway between the European Union and Russia. And even the differences between the two cultures give a good outcome. − The Russian universities have traditionally a strong orientation to natural sciences in educational programs, whereas in the Finnish universities a problem oriented approach in education prevails. The CBU cooperation provides the Russian universities with a strong support to internationalise the educational programmes and to broaden the study offer in English further. The traditions and culture have their

differences between the Russian and Finnish universities, but this has been a strength giving added value rather than an obstacle, giving the students multicultural skills and ability for the working life. A lot of work is to be done still. As projects, such as CBU, need a strong co operation between governments, universtities but also with companies. − The cooperation with Russian companies is yet in its’ early stages. The main channel will be the FinnishRussian Chamber of Commerce. International companies active in Russia

has shown increasing interest towards cooperation with the CBU for getting trainees and skilled graduates. The goal of the CBU is to grow along the Russian-European border region and in the European Union forming a gateway in education and research within the area. − The need in the society and labor market for internationally educated people is great and growing all the time. The CBU is responding to this need in the right time. The CBU is strongly developing a Russian-European cooperation culture and spirit. www.cbu.fi

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AVIAPOLIS

INTERNATIONAL INNOVATION HUB

Business Finland 5/2011

Sixt Finland

- Committed to Customer Service

Sixt Finland began operating in 2005 and has grown rapidly despite the economic downturn. Today, the company has 22 offices in major cities and airports across Finland. In July 2010, it was acquired by Veho Group, the largest automotive corporation in Finland.

Perfect customer service Sixt Rent a Car is famous for having fast rental administration, a simple reservation system and ready-to-go cars. It was recently voted the best car rental company in the world by readers of Business Traveler USA. As in all Sixt offices, Sixt Finland is committed to providing its customers with perfect service. Customers have a choice of reserving a car using the phone, internet, smartphone or email. The Sixt smartphone application has become increasingly popular over the past few years. With the Sixt Express Card, customers can save valuable time when booking and picking up a car as all their details are saved under their loyalty card number. In central Europe, Sixt has quick check-in kiosks where customers can simply enter their reservation number, sign the rental agreement electronically and collect their car keys from an electronic deposit box. This facility is not yet available in Finland but the company says that its friendly staff make sure customers get their keys within minutes. "Cars are serviced regularly to ensure maximum safety for customers," says Sixt Finland's marketing manager Taina Kivistö. "They are cleaned just before the customer's arrival to ensure comfort. Naturally, Sixt offers any additional equipment required such as child or baby seats, navigation systems, winter packages and ski racks. In many locations the secure key drop box gives customers the possibility of returning the car at any time."

Automatic and manual Sixt Finland has a large variety of vehicles ranging from small economy cars to vans, trucks and luxury SUVs. Cars are available with either automatic or manual gears. As a subsidiary to Veho Group, Sixt Finland is able to cater

for all the needs of its customers and for any size order. Sixt has around 100,000 rental cars around the world, excluding limousines and lease vehicles, and it is Mercedes-Benz’s biggest corporate client. All Sixt cars are new; their average age is just six months. “During the summer, Sixt Finland also offers more exotic cars like cabriolets. In Spain, France and Germany Sixt customers have the choice of Sixt Luxury Cars. How about a Ferrari or a Maserati? Or perhaps you prefer a Rolls Royce?” suggests Kivistö. As with all car rental companies, Sixt customers need to provide a valid drivers’ license and credit card in order to rent a car. Online customers can also opt for a prepaid booking, which can lower the price by up to 10 percent. Insurance can be purchased from Sixt to cover the car in case of an accident. Loss damage waivers do not provide cover in case something happens to the glass or tyres of the car, so customers can opt for special glass and tyre insurance. "Insurance policies cab have major differences depending on the country you rent the car in. It is advisable to make the booking in your home country where you can ask questions from a local Sixt representative in your own language. In Finland, during the winter all Sixt cars comes with winter tyres with studs, as winter chains are not used in Finland - despite what many southern customers think," says Kivistö. n www.sixt.fi

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Strong Competitiveness with

Vantaa’s Strategy

The City of Vantaa and especially its ‘Vantaa Innovation Institute’ have a central role in the development work of the Airport city of Helsinki-Vantaa. Deputy Mayor of Vantaa, Mr Martti Lipponen says that Vantaa’s active entrepreneurfriendly policy add to the competitiveness of Vantaa both nationally and internationally.

evelopment work of the City of Vantaa is based on Finland’s excellent global logistics location. “This holds true in air traffic first of all. In most cases most direct and quickest flights from Europe to North Asia and from North America to India go via Finland. The Helsinki-Vantaa Airport is located in the city of Vantaa, (to the north of Helsinki.) Development of Finland’s utmost international airport gives a strongly boosts regional developments in the vicinity of the airport. “This is why the City of Vantaa has had strong economic development policy for more than 10 years,” tells Vantaa’s Deputy Mayor Martti Lipponen. “The role of Vantaa Innovation Institute is important in developing economic policies of the city. The institute coordinates the construction of competence centers where universities and companies co-operate.” These competence centers and clusters attract international corporates and organisations into Aviapolis area. (Aviapolis is a 42 square km airport city, which has strong real estate, traffic and other developments going on.) One strength in Vantaa development is that land-owners, real estate develop-

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ers and the city have co-operated in zoning and other issues already for decades. “Although the city does not have many land ownerships, zoning is done in the way that the given area will develop in a varied, often containing both residential and work-related areas.”

Innovation hubs In addition to core Aviapolis area, interesting business and logistics areas like Vehkala will emerge, close to the future Ring Rail (which will be completed in 2014). The Aviapolis area has been evaluated by international consultants. “We are glad and proud that renown company Kasarda estimated in its benchmark study that Aviapolis area is a good example on how to develop smaller airport city in a right way,” says Lipponen. “The aim of Vantaa Innovation Institute Ltd is to create clusters, which we call Business Labs. These have been built in environmental-, sensor-, RFID-, airport-related and food safety technologies and services. New emerging business labs are related to communication and epaper technologies. These together with test and piloting environment of Aviapolis and Marja-Vantaa these labs create an innovation hub.”

Martti Lipponen, Deputy Mayor of City of Vantaa

Quality of life However, it is not only about Aviapolis and Vantaa. “We co operate with the Greater Helsinki Promotion (GHP), which was established by the cities of the capital region to drive strategic international investments into the region. The Greater Helsinki Promotion is the sales organization for the Helsinki Business Hub.” The whole Helsinki region, also Vantaa with its 200 000 inhabitants, offers a very high standard of living and welfare. According to most quality of life indicators, this region is amongst the best places in the world to live. “Vantaa has some really pleasant residential areas like Kartanonkoski. New areas of Leinelä and Marja-Vantaa are under construction. These are carefully planned areas, where different kinds of living needs have been taken into account. These are attractive enough for anyone.”

Aviapolis

Reijo Päärni, Marketing Director at NCC Property Development Oy

“I believe that especially Aerola residential area just next to the airport could offer pleasant surroundings for foreign professionals coming to work in Finland. (In spite of the closeness to the international airport, aircraft noise is very low.)” “Ring Rail that combines the Helsinki-Vantaa airport to the Helsinki city center and many suburbs in Helsinki and Vantaa, will change the capital region more than we possibly think. Accessibility of airport will be much better, and the east-west commuting in the area gets easier.” Many new real estate developments will emerge around the existing and new train stops. Environmental issues are taken into account. The City of Vantaa does not have that many land ownerships than for example Helsinki. “This means that we work even more closely with real estate companies. We listen to their wishes and they listen us. The final decisions about zoning are always, however, done by politicians. When we have introduced our model in Airport Regions seminars and New Town Platforms, many have been interested about the flexibility of this approach.”

The most entreprenur-friendly city Deputy Mayor Lipponen notes that it is also good to remember that Vantaa city officials are renowned for its entrepreneur-friendly approach. “In several studies, made both by chambers of commerce and Vantaa entrepreneurs in the last few years, we have been number one in understanding service needs of companies.” “We have organized the service according to One-Stop principle. Vantaa Innovation Institute can offer business development services through which a company can easily get connected to potential customer as well as partner network.”

Developers’ viewpoint Major landowners, property developers and service providers work together with the City of Vantaa through the Aviapolis area development & marketing group. The chairman of the group, Mr Reijo Päärni, marketing director at NCC Property Development Oy, reminds that Aviapolis is the most extensive and unique public-private co-operation project in Finland. “Our intention is to turn Aviapolis into a calling card representing the whole of Finland. We are more than ten mem-

bers in the development group. Right from the beginning the aim was to create a clear identity to this area of 42 km2.” The area was thus named Aviapolis. Today Aviapolis is the first or second-attractive business district in Finland, says Reijo Päärni. “There is much more than just office premises. Retail, logistics and pleasant residential spaces have been built within ten years, and the area keeps developing. The future Ring Rail will further boost the development. The Aviapolis group comprises also property developers. “Naturally these companies also compete, but it is not very usually that developers also co-operate so keenly. The city of Vantaa is involved in development work. The city is very open to new ideas, and we developers listen to them. Vantaa business development services are open to all companies in the area, not only for us established ones. Their One-Stop approach is worth trying.” “I believe that in spite of the recent insecurity on financial markets, the Aviapiolis area will see many developments in near future.” The company Päärni represents, NCC Property Development Oy, has been in charge of Plaza Business Park development, with as many as many ten completed buildings and three more to come. n www.vantaainnovation.fi

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LAK - Helping to Build Varied Airport City Text: Klaus Susiluoto

In Finland, the Helsinki Airport and the Aviapolis sub-city of 42 km have developed hand in hand, and the real airport city is on formation. Lentoasemakiinteistöt Plc (LAK), a subsidiary of Finavia Corporation, has an important role in this development.

owadays airport surroundings are the most dynamic part of the larger business or administrative city. However, there are still relatively few airports, around which a real airport city – not only warehouses and terminals – has been developed. In Finland, strong steps have been taken to the right direction. Airport land owners, real estate developers, the City of Vantaa and Finavia have worked together to make the Helsinki Airport and Aviapolis a stronger transport and business hub, also with comfortable residential areas. LAK plays a significant role in this. “LAK is a property company wholly owned by Finavia, which is responsible for operations at Finnish airports,” tells the director of project development of LAK, Mr Juha Jaakola. “We lease premises in our buildings located at airports for the needs of businesses that are part of the air traffic service chain. However, we do not own passenger terminals, multi-storey car parks or buildings that are directly related

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Juha Jaakola, Director of Project Development of LAK

to Finavia's own operations.” “Our portfolio includes logistics buildings, offices and hotels. Some office space is available at the moment from tens of square meters to several thousands of square meters. However, on the drawing board there are large-scale projects.”

Vantaa’s Role In the future, also different kinds of activities will emerge close to the airport. With this in mind, LAK participates in the development of the area, but do not play a contractor’s role. “Zoning is done in cooperation with the City of Vantaa. In the first phase, probably 200 000- 300 000 square meters will come to be finalised in the Aviapo-

lis area by us and our partners,” says Juha Jaakola. “The plot owned by us is 15-16 hectares. The area where we operate is the central part of Aviapolis. Residential housing, a hotel, shops and other services and kindergartens will be constructed, in addition to the office space. “Our aim is to create a real lively suburb out of the area. At the moment there are several houses in near-by Aerola, designed by the famous architect Alvar Aalto, but the number of residents will multiply. “Contrary to the common belief, there can be living areas just a few kilometres from the airport. Modern aircraft are environment-friendly and flight noise is surprisingly low,” says Jaakola.

The Helsinki Airport will get the urban rail line in the near future. Railway will arrive at the Helsinki Airport in 2014. The Ring Rail Line, as it is called, will connect Helsinki Airport and the adjacent Aviapolis business and retail district to the Helsinki commuter rail network. Four new stations will be built, with space reserved for four more in the future. The journey time from the airport to Helsinki Central Railway Station will be about 30 minutes. â&#x20AC;&#x153;This will further facilitate the growth of Aviapolis airport city which is emerging around the Helsinki Airport. Two new train stations will pro-

vide further accessibility â&#x20AC;&#x201C; one at the airport and the other exactly in the centre of Aviapolis. The latter station will locate in the middle of the emerging new commercial and residential concentration,â&#x20AC;? says Juha Jaakola. LAK is also managing the WTC Helsinki Airport, the highest building at Helsinki airport. The original 22 000 m2 WTC in separate building was not realized, but permission for the building still exists. It will in all likelihood not be another WTC building, but some other premium premise. The existing WTC is also very modern. Some minor spaces can still be rented. LAK also owns the hotel property of Hilton Helsinki Airport ( see the related article). n www.lak.fi

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Aviapolis

Urban rail line boosts developments

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Modern Scandinavian Style

Airport Hotel

hrough the Hilton Helsinki Airport, LAK is also involved in leisure and business travel business. LAK owns the newly enlarged Hilton Helsinki Airport and was also responsible for the building process. The main contractor was Skanska Talonrakennus Oy and the architect was KVAArkkitehdit. “Hilton Helsinki Airport has been so popular that the enlargement was necessary. The project was finished in the spring 2011,” tells the General Director Ari Arvonen. “It was very challenging to build at the both ends of the building and at the same

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Aviapolis

time to have the normal hotel and conference operations going on, but this expansion went overall very smoothly. “We expanded the hotel by adding 84 rooms in total 3600 m², plus a 400 m² multipurpose meeting and restaurant space. Both are very important for us. Now we can have large meetings at our 400 m² ballroom and the space of the same size for dinner. In a la carte restaurant there is space for hotel guests. “Finns are the biggest customer group. In group conferencing there are more local guests. But often there are international delegates involved. Individual hotel customers are mainly international businessmen and businesswomen. Finnish leisure guests who are going or coming from their charter flights are also important for us. “We have many guests from the USA, and more and more Asians use the hotel’s services. “It seems very clear that our customers appreciate the Hilton brand. Especially international guests are looking for globally known hotel brands. Hilton brand is the most well-known hotel brand in the world. “Hilton Helsinki Airport is situated at the actual airport area, while some hotels that use the term ‘airport hotel’ are actually 2-3 kilometers away from the airport. Our hotel guests can walk from hotel to the terminal. The main reason for all of our guests to choose Hilton Airport is that they can save time and have an easy stay at our premises.” Hitlon Helsinki airport has invested in activities. “We have a large and modern gym open 24/7. The gym services are included in the room price. Also two saunas are for free for guests’ use. Our guests are happy for that. Hilton Helsinki Airport can also offer special fares. “We have cooperation with several airlines.” “At weekends and at holiday seasons our room rates are very moderate. Customers are quite satisfied. They like a lot our modern Scandinavian design besides the convenience of our location so close to the terminals,” says Arvonen. n www.hilton.com/helsinki

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The New Look of

Blue1 To meet the challenges the needs of rapidly expanding route network, Blue1 is investing in a new fleet of Boeing 717 aircraft.

he Boeing 717 is a modern aircraft to operate short- and mediumhaul flights, making it the perfect type for flights between Europe and Finland. “All of the aircraft are manufactured during 2000’s and equipped with modern technology. The Boeing 717 has size comparable with larger aircraft. There is enough seating place and leg room. The luggage store is also equal in volume to that of larger aircraft,” says Tom Christides, Vice President Communications of Blue1. “We have leased six Boeing 717 planes, with three more to come by the end of March. The 717s can seat 115 passengers. In a way, our previous plane was too big with 166 seats. We still have 5 AVRO fourengine planes, three ATRs and two SAAB 2000 planes. Old MD 90 airplanes will not be used any more.” Tom Christides

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Juhani Suomalainen

Aviapolis

Blue1 Premium Blue1 has only two classes, Economy and Blue1 Premium. The latter one is almost equal to business class. “Well, you do not get champagne, but a good selection of food and drinks are included. Fares are just significantly lower. Premium includes genuine business class features such as Business-Class check-in, fast-track security control, premium-class seating, a baggage allowance of two pieces of 23 kilos and flexible re-booking options with Blue1 or SAS. Full refund is possible,” says Tom Christides. If traveller does not need a flexible ticket, the choice is Premium Holiday. It means seating in the Premium Cabin, but without the flexibility to re-book and cancel. Economy Class offers good basic service.

Part of SAS Group Blue1 has been part of SAS Group since 1998, which supports company’s operations in a good way. “We are also member of Star Alliance. Being part of this alliance gives us a total of 1170 destinations. Our own route network of Blue1 route covers major North and Central European cities. The number of our passengers increased to 1.5 million.” “We started three new destinations already

in 2010, Berlin, Brussels and München. We now have two daily flights also to London, Brussels, Paris and Zürich, from March on, to Amsterdam,” says Christides. “We also have so-called summer collection - destinations to France, Croatia and Scotland. In France we have Nice and Marseille as a new one, In Croatia Dubrovnik and Split. Pula is a new destination. To Edinburgh we also fly in the summer time only.”

“Flowing" Stockholm and Copenhagen play an important role in Blue1’s strategy: “We have Vaasa-Stockholm, Tampere-Stockholm and TurkuStockholm routes, where we have established position.” Copenhagen ensures connecting flights to North America and Asia. “SAS is launching Copenhagen Shanghai route in addition to Tokyo, Bangkok and Beijing.” Blue 1 operates in Helsinki in the terminal one, which is quite compact. “However, the terminal can become even two small within a couple of years. Modernisation and enlargement of the terminal would benefit customers.” Since this year, Blue1 also has had a new visual look. “Aalto University participated in the work. The winning proposal was called Flowing. Also Air Finland and Finnair have renewed their visual outlook, but Blue1 was the first to launch the new look.” n www.blue1.fi

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ScanWings – Almost there Text: Juhana Hurula Pictures: Sini Pennanen, ScanWings

ScanWings is a business flight company that wants to take you higher. It offers its clients top notch service.

canWings Ltd is a Finnish company that offers first-class business flights. It operates from Helsinki-Vantaa international airport with a jet and two prop planes. The phone lines are open 24/7. They are ready to operate at two hours’ notice. “Time is money. There’s no reason to queue in lines at the airport when it’s possible to save several hours of working

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time when flying with us. It’s a lot easier and quicker when one can board the aircraft via a business terminal – all the luggage handling and security checks are provided. Air travel is a lot faster. Furthermore, there’s no need to worry about time-consuming flight transfers and traffic, because ScanWings flies directly to the nearest airport,” Sales Manager Yrjö Jussila says.

The schedule will be tailored to fit the passengers’ needs. If the plans should change while travelling, whether it be the timetable or destination, ScanWings is flexible: one phone call and a new flight plan will be mapped out. “The passenger can concentrate on work, prepare for a business meeting, or just sit back and relax during the flight. We order our catering from high-end

Aviapolis

Sales Manager Yrjö Jussila

gourmet restaurants to serve our clients the luxury they deserve. Our aircraft seat configurations have been tailored to provide the best possible facilities required for an in-flight business meeting. Professional travellers can respect this. Travelling is not luxury, but hard work,” Jussila stresses.

SPECIALITIES Besides business flights, ScanWings also does medical and ambulance flights. King Air aircraft can easily be converted for the special transportation needs of various medical and ambulance flights. It allows medical personnel to accompany and treat the patient during the flight. It also offers a high-speed alternative to urgent transplant deliveries.

One of the company’s specialities includes weekly flights to measure the accuracy of aeronautical radio navigation equipment that is in use, for example, on airport runways. ScanWings has been a partner of the Finnish Aviation Authority for many years when conducting these special flights. ScanWings also does cargo deliveries. n www.scanwings.fi

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Aviapolis Text: Juhana Huurula Images: Sini Pennanen, Sokos Hotels

Sokos Hotel Flamingo S

okos Hotels is the biggest hotel chain in Finland, with over 40 hotels in Finland, Tallinn and St Petersburg. According to Statistics Finland, it has one third of the domestic market. All of the hotels are located in city centres or on leisure sites and have good transport connections. “The three most important factors for a hotel are location, location, location,” says Heli Engblom, general manager of Sokos Hotel Vantaa and Flamingo. “People need to get away from their everyday life. A significant number of our clients come from within an hour’s driving distance. Nearly 80 percent of our clients are Finns; eight per-

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cent Russians; then come the Brits and the Swedes.” Sokos Hotel Flamingo is located in the Flamingo entertainment complex. This is the Las Vegas at the ring roads, close to the Helsinki-Vantaa airport. The hotel offers accommodation for 800, and basic congress facilities, but a full-on action playground awaits. Flamingo is the biggest entertainment centre in Scandinavia and it opened in 2008. It is connected to the Jumbo shopping centre and its 120 shops. The Flamingo maze includes a spa and a water park, pampering services, shops, cinemas, bowling alleys, nightclub and restaurants. It is a consumer’s paradise. Many business people bring their families to enjoy quality

Aviapolis

lesiure time together. “Everything is here. When a customer approaches and says that he didn’t even step outside once, we are pleased because that means we got their heart and wallet,” Engblom says and smiles. Different types of events for as many as 300 people can be organised at the facilities of two private restaurants, Amarillo’s and Banquett’s. Twelve various-sized meeting rooms (12-140 people) provide all the necessary equipment.

Leisure & Relaxation Sokos Hotels offers a wide selection of different leisure packages

to fit one’s needs and preferences: culture, fitness, pampering or partying.

Business travel Sokos Hotels lures business travellers by offering an S-Card that offers its users various benefits and discounts.

Company Sokos Hotels is a part of S-ryhmä, a Finnish co-operative trading company. It was founded in 1904. It comprises the SOK Corporation and its subsidiaries in addition to 22 regional co-operatives. It has 1.9 million customer owners. n www.sokoshotels.com

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Lapponia Lakka Cloudberry Liqueur - Experience the Northern Wilderness

apponia Lakka cloudberry liqueur makes an excellent gift to bring back home from Finland. This exotic drink is made from hand-picked cloudberries and can be enjoyed just as it is, but it goes particularly well with coffee and desserts. Lapponia’s tradition of liqueur-making goes all the way to 1867, when Russian Tsar Aleksander II granted rights to Turku-based merchant Anders Nordfors to manufacture alcoholic beverages. The production of Lapponia Lakka liqueurs has remained in Turku in southern Finland to this day. Lapponia Lakka, a golden, delicate and aromatic liqueur, is made from hand-picked cloudberries from Finnish nature.

Part of a global group Lapponia is now part of the Pernod Ricard group, a world-leading wine and spirits producer known for its premium brands. Pernod Ricard’s portfolio includes well-known brands such as Mumm and Perrier-Jouët champagnes, Absolut Vodka, and Scotch whiskies Chivas Regal and The Glenlivet. Cloudberry (rubus chamaemorus) is often seen as a Nordic berry, but it grows in northern Russia all the way to the Pacific Ocean. Cloudberries also grow wild in northern Canada and Alaska. Cloudberry is a marsh plant with many different names in Finnish. Its berries can be found in open and wood-covered marshlands all over the country. The leaves of the cloudberry are very sensitive to harsh growing conditions, such as heavy rains or night frosts. In Finland, the plant’s white flowers are in bloom in June and the golden berries ripen in July/August. A ripe berry is yellow, juicy and

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tasty. Cloudberries are one of the most valued wild berries in Finland. Cloudberries contain more fibre than other Finnish berries, and their vitamin A and C content is high. They also contain more vitamin E than many other fruit and vegetables. Cloudberries are even used in skincare products made by the cosmetics industry.n www.pernod-ricard-finland.com