Think of the Finnish forest products industry and it’s a pound to a penny that the first names that spring to mind will be the massive conglomerates that dominate timber industry news.
There is another, however, that without any attendant trumpet-blowing, has been carving a sizeable niche in the market. And, unusually, in the current climate of mergers and acquisitions, 70 years on Koskisen Oy remains a family-owned company.
The Koskisen seed was sown three generations ago when Kalle Koskinen started a sawmilling company in 1931. Kalevi Koskinen assumed control of the company in the early 1950s and under his leadership it expanded rapidly into new areas such as plywood and chipboard. In 2001 the company has again passed to the next generation of the family – Kari and Markku Koskinen.
Today Koskisen has a foot in several camps – plywood (80,000m³ per year), chipboard (100,000m³ per year) and sawmilling (160,000m³ of whitewood and 40,000m³ of redwood per year). In a year it also produces 65,000m³ of planed wood, the majority of which is destined for Japan and Germany, 25,000 roof trusses, 3,000m³ of birch veneer, 20,000m³ of birch sawn timber and 2,000m³ of birch edge glulam. And it manufactures around 500 house ‘kits’ under the brand name Herrala-Talot, mostly for the domestic market.
Koskisen’s parent company, Koskitukki Oy, which procures the wood (950,000m³ per year) has a turnover of €153m (FMk909m) and employs 1,050 people.
Around 60% of total production is exported and the whole range is exported to the UK to a greater or lesser degree – if it’s not already being shipped here, it’s certainly available through its UK sales office in Westerham in Kent.
As Peter Barnes, Koskisen’s UK sales manager, explains, ‘about 85% of plywood production is exported and about 70% of sawn goods. We also export birch lumber from Koskisen’s daughter company Vilkon Oy [purchased in 1996], although that production is more for Finland’s domestic market’.
Mr Barnes also brings chipboard into the UK, but in view of the fact that the UK has around two million m³ chipboard production of its own, Koskisen competes with ‘specialised’ product.
Speciality products
In fact, Koskisen is something of an expert when it comes to specialising and many of its customers know it as a producer of specialist plywood. ‘Our biggest seller in volume is sawn goods but in value it’s plywood,’ says Mr Barnes.
‘Our strategy in all our units is added value. I know it’s a cliché, as is “niche markets”, but they do apply,’ he continues. ‘If you go back 10 years, added value was a phenol coated board coming out of Finland. Well, anyone can make that now and, with the Latvian and Russian mills putting in production, as well as other Finnish mills, it’s meant we have to go even further down the line of speciality products or looking at more specific custom-made products for end-users’.
Koskisen went further down the line to the tune of €34m in September last year when it built a 10,000m² birch plywood factory complete with 30-daylight hot press at its main site in Järvelä.
Plywood production will hit around 80,000m³ this year, says Mr Barnes, and the eventual total plywood capacity will exceed 100,000m³ after the completion of the two year investment programme. But the factory’s biggest claim to fame is not volume but size.
The intention is to produce the largest single piece birch plywood panel in the world – 1900x4000mm. And that ambitious aim is well within the company’s sights. ‘We haven’t quite hit the 1900mm width,’ says Peter Barnes, ‘we’re more 1800/1830mm at the moment, but when the new sanding line is installed we’ll be up to 1900mm and that will give us a huge advantage. With a mix of cut sizes and larger sizes and less wastage, we’ll be able to compete in areas where we couldn’t before. I’m looking forward to 2002.’
The biggest potential markets for the new size will be in overlaid panels, both smooth and textured, designed specifically for the vehicle building and construction industries.
The boards will be suitable for form work and scaffolding but may have their finest hours as vehicles floors, an area on which much of Koskisen’s plywood development work has been focused. Higher road transport volumes in Europe and rising fuel costs have resulted in a need for vehicles with a higher load bearing capacity coupled with a lighter weight construction and the company has successfully developed durable, lightweight engineered products in collaboration with customers for heavy-duty floors, vehicle sides and doors. Koskisen’s new giant boards will enable longer vehicle lengths with fewer joints to be achieved.
Key to Koskisen’s success is its relationship with its customers and the bespoke service it provides. For example, a new testing facility for heavy-duty floors – believed to be unique among Finnish mills – has been constructed at the plywood factory. Moving axle loads up to nine tons can be tested with any plywood construction and any supporting structure, enabling the company to test the best floor for each individual vehicle manufacturer.
There’s nothing off-the-peg about Koskisen plywood as Kari Koskinen, director of the company’s plywood industry, says: ‘We carry out development projects with customers and work together to solve problems. Our business philosophy is based on the ideology of ongoing improvement. We don’t just stand by and watch progress – we are actively involved in it.’
Still relatively small compared to Finland’s industry giants such as Finnforest and UPM-Kymmene, the Koskisen group is more than able to play with the big boys and part of its strength is the fact that it is not sidetracked by pulp and paper issues. These are often the main drivers of large groups, with mechanical wood processing being tacked on simply as a means to use the larger log sizes.
‘We haven’t got huge production, but pro rata we might be more efficient,’ says Peter Barnes.
‘Last year Finland exported around 35,000m³ to the UK and if you go back 10 years that figure was probably 50,000-60,000m³, so the market for Finnish products has definitely shrunk. We’ve got one or two specialised stockists or importers who live with that market, but we also try to generate, not necessarily new areas, but existing areas that may not be known to our customers.’
Since the summer, Gill & Robinson in Newcastle has looked after the company’s softwood sales into Scotland and, in the wider sales context, the group has two sales offices in Germany, one for sawn goods, one for plywood, one in Amsterdam which covers both the Netherlands and Belgium, one in Tallinn in Estonia, one in Paris and a Swedish one in Gothenberg. This year has also seen offices opening in Spain and the US – ‘there are volumes going out there and we felt we didn’t have our market share,’ says Mr Barnes.
Loyal customer base
The customer base is loyal, which enables the UK office to predict the contents of its shopping list, but this would still be difficult without ‘fantastically flexible production’.
‘Normal lead time is four or five weeks, but we can hold a buffer stock in Finland for specific customers. We also run an allocation system – which I think is unique to the mills – whereby I predict volume for the UK market on history and then book weekly production slots. That way, if lead times go out [for everyone else] I’ve still got my slot and can keep them down.’
Looking to the future, Koskisen is likely to consolidate before any more major developments. As Mr Barnes points out, the e34m plywood mill is the most recent in a string of investments including a new chipboard line in 1995 which doubled capacity to 100,000m³ and the Vilkon purchase which saw the installation of, among other things, the edge gluelaminated birch line.
Three years ago the group invested in its Koskifutura line. Koskifutura is a strong exterior birch or combi plywood overlaid with a coloured multi-layer plastic coating.
‘It’s the only roller coating line of its kind adapted for plywood in Finland and it takes us away from the usual phenols which any mill can do. Koskisen can now do continuous press laminates, plastic laminates – all sorts of different laminates onto the plywood for industrial decorative purposes. Again, it was an addition to the added value range. Not only do we try to keep one step ahead of the outside competition, we also try to steal a march on the internal competition.’
As for the UK office, Peter Barnes has a product portfolio to die for, from specialist chipboard which can be ‘mixed and matched’ to suit individual customer’s specifications in terms of specific bending strengths, elasticity and so on, to rough sawn timber and truss material. ‘We try to be something for everyone,’ he says. ‘And because our product range is so diverse, if one area is down, another will be up.’
As he says, he’s looking forward to 2002. As well as the large size plywood panels, he’s fostering an interest in thin plywood. ‘It’s a very high value item and I’m certainly going to give it a go,’ he says. ‘I feel sure we can do something and I think the market might welcome another player.’
