• 2/13/2019

Resident Interview – Ponsse

Ponsse, a Finnish company that is a global manufacturer of forestry equipment, is expanding its presence in the Greenstate Industrial Park in Gorelovo. It has bought another 0.5 hectares recently, and is currently building a new service complex and training center on that lot. What allowed the company to expand its area, why did Ponsse choose the site in Gorelovo, how relations with YIT, which manages Greenstate are developing, – Jaakako Laurila, Director General of Ponsse LLC, answered these questions.

- Mr. Laurila, tell us briefly about the company: what it does, in which countries it is represented, when it came to Russia?

- Ponsse was founded in 1970 in Finland, we will soon turn 50 years old. Over the years, a small family-owned company from the outskirts of Suomi has grown into a leading global manufacturer of forestry equipment. Today Ponsse is working worldwide: in Europe, USA, Brazil, China, Hong Kong. We came to Russia relatively recently, in 2005. However, today it is here that we have the largest subsidiary company, and the country is our largest market too. So far, sales in Finland are slightly higher than in Russia, but at the end of the year it is quite possible that that figure will change in favor of Russia.

Ponsse manufactures, sells and services machines for harvesting forest products in assortments: harvesters, forwarders, Dual harwarders, manipulators, etc. When using the assortment logging method, tree trunks are cut to desired length right on the plot. And information systems report to end consumers instantly on the type and amount of wood they will soon receive. All data is transmitted via wireless networks in real time.

All such equipment is assembled in Finland, and its components and sets come from the leading global enterprises. In Russia, we sell equipment, service it, and also teach people to operate our machines.

- How many representative offices do you have in Russia?

- Ponsse LLC has 10 dealers in Russia and one in Belarus. Four representative offices of Ponsse LLC operate in the North-Western region, including Gorelovo, Tikhvin and two in Karelia. The head office and main warehouse are located in St. Petersburg, it is from here that we are sending spare parts out. The equipment that is purchased for Russia arrives through the Sea Port of St. Petersburg and from there it is sent to our customers by rail or by truck. In total, about 500 people work in Russia, taking into account the employees of dealers.

- What factors were important for you when choosing a site to construct your enterprise?

- Initially we looked for a plot rented out. And for the first three years, we used to rent premises from Viking, a company here in Gorelovo too, and then bought the building with its plot from them, so now it is them renting part of the premises from us. Ten years ago, when we were looking for a site, there were just a few offers like these here in St. Petersburg and the Leningrad Region. It was important for us to get settled near the city. There is good logistics here, heavy equipment can be transported by the Ring Road, and the Marine Port is not too far, which is also important for us. Everything here is the way we want it.

- Was the southern direction important for logistics?

-Optionally, we considered the north as well. But here everything was set and ready, already: a quiet clean area, good and convenient access roads, a modern building, and YIT tried their best to help us.

- Why did you decide to switch from rent to purchase?

- We pursue such a policy: if there are suitable areas, we prefer to rent them. And if there are none, then we buy land and build the facilities ourselves. Recently, in Russia we have been buying more and more, because there are no prepared areas ready for rent in new industrial zones. In addition, Viking decided to reorganize its business, and suggested that we buy their building with its plot from them, and we agreed immediately.

- Later you bought another 0.5 hectares at Greenstate. What enabled you to decide on expanding your presence here?

- Investments did, nothing is possible without them. If we want to have good market performance, then we need to invest in development. Our business is growing gradually, and we are getting short of space, additional space for service and training is required. Taking into account the already purchased plot, we will total approximately 1.0 hectares here on the Greenstate site. Moreover, the issue of acquiring an additional lot to demonstrate equipment is currently being considered.

Meanwhile, we are developing a twin project in Tomsk, where we will build a similar building. In addition, we purchased a building for a spare parts warehouse in Tikhvin to have a possibility to service our equipment operating in that region. Every year we have something new emerging.

- What do you plan to build on the new site in Gorelovo?

- A service and training center with an area of about 1,500 square meters. It will be the only center of its kind in Russia that will specifically train machine operators felling wood. We will train specialists to manage and maintain these machines. We will install a simulator to make hands-on training possible. Service is not as important on this site, because there is not that much machinery in need of maintenance around. A working service center in Karelia is more in demand in that regard. However, we also need a similar service here at Greenstate, because its is not only new, but used equipment that we are selling, and that requires special training – this is the practice all over the world.

- Do you mean used equipment shipped from Finland?

- There used to be more of it coming from Finland, but today almost all of it comes from Russian regions.

- What do you earn more from: selling equipment and spare parts or servicing it?

- Sales are bringing more in. As for servicing, the situation is more complex, since reaching the equipment is cumbersome: as a rule, it is sitting in the woods, where transport accessibility remains difficult.

- How did your relations with YIT develop from the very beginning of cooperation, and how are things today?

- In general, everything is fine, issues do emerge always, but they are all resolved. We are satisfied and are not going to look for other sites. We do like it here: both from the point of view of location, and attitude of YIT towards us.

There are small technical hitches, but I think they are solvable as well. It is not always easy to secure additional power. True, solving these issues does not depend on YIT so much, but on monopolistic suppliers. Greenstate is a nice and comfortable area.

- What are your wishes? What is YIT worth working on?

- So far, there are no special wishes, all issues get resolved on the way. Now, many of our employees have to get here from the city. It would be nice if a metro station or public transport stop would appear nearby. But I understand that it does not depend on the goodwill of YIT, and is only possible in the long run. I would also like to get to know other residents of the Park closer. YIT sometimes organizes joint events for residents, but personally I have not had such an opportunity yet. I think that everything is still ahead!

Reference statement:

Ponsse was founded in 1970 by Einari Widgren, a logging entrepreneur. The equipment by other manufacturers available at that time could not cope with work in difficult conditions, so he decided to develop his own. So the first Ponsse machine appeared. Very soon, it began to quickly win the hearts of consumers, and in order to meet the growing demand, Ponsse Plc was created.

Today Ponsse is a leading manufacturer and pioneer of forestry felling machines, working on assortment technology. The technology allows for high efficiency in the most diverse climatic and geological conditions in which operators all over the world have to work. Harvesting a wide variety of wood species – from old pine to eucalyptus – the machines work flawlessly both under the scorching tropical sun and in conditions of Siberian cold. Machines move around with minimal damage to forest soil and can also climb up steep slopes.

Ponsse operates in more than 40 countries. The company's shares are listed on the NASDAQ OMX Nordic.