Case study

Russian Eltechnika trusts the Finnish workmanship and quality

Smooth financing and the high moral standards embedded in the Finnish working culture are set to bring benefits to the Russian metal industry company Eltechnika, which has started a subsidiary in Lappeenranta, next to the Russian border.

Starting with just five personnel, Eltechnika Finland has manufactured electrical components since 2010 for installation in the final products of its parent company in St. Petersburg. The production line initially consisted of power switches and switchboards made of sheet metal. Now the staff of Eltechnika Finland is double, the range has increased and the value added factor has grown along with the turnover - from EUR 90 000 in 2010 to being EUR 1.6 million in 2012.


During the summer 2013, the company will expand its production in Finland to include a painting facility, for which it will extend its factory with an investment of EUR 1 million. The new business activities also include the commissioning of new robotics and recruitment of more staff.

 

Smooth financing process helped establish business in Finland

 

When Lauri Arminen, MSc (Tech), started as CEO of Eltechnika Finland, he already had experience in working with international companies. Getting finance for business is a lot easier in Finland than in Russia. Leasing for the first machines was relatively effortless and also the finance from the ELY centres’ (The centres for Economic Development, Transport and The Economy) was smoothly arranged.


“Investing in Finland is a great deal cheaper than in Russia, thanks to the lower interest rates available here,” explains Lauri Arminen.
The Russian parent company has been pleased by the fact that the maintenance and service of machines is better in Finland. In addition, buying machines and doing business is safer here thanks to the long-term stability of Finnish society. Delivery schedules are on schedule and there are no uncertainties of the ownership either.

 

“The Russian owner has admitted that even though the Finnish raw materials might be more expensive than Russian, overall benefit derives from the evenness of quality and the reliability of delivery, Arminen states.”

 

Efficient and trustworthy Finnish employees

 

Of course the Finnish work culture differs from the Russian one. Finnish employees are used nowadays to perform their tasks quite independently. Efficiency and reliability compensate for the higher labour costs of the Finnish employee. It is also a great plus that finished products exported from Finland to Russia attract almost negligible tariffs.


Before starting its businesses in Finland, Eltechnika consulted Invest in Finland, which forwarded the case to the Lappeenranta Business & Innovation Services. The communal service organisation found suitable premises in Lappeenranta and introduced Eltechnika to the local science and industry circles.


Lauri Arminen believes that there is a growing demand for extra services for foreign companies to start up business in Finland. The relatively easier means of doing business and the fewer levels of bureaucracy in Finland appeal to Aleksei Argunov, CEO of the Russian parent company Eltechnika. He is convinced that the stable society and the quality of workmanship and raw materials make Finland an interesting investment target also for the other Russian companies.


Eltechnika’s expansion in Finland should continue by making finished products, like whole electrical centres, also in the Lappeenranta factory.
“When a Russian company does its production in Finland, it also qualifies for the Finnish quality label, which is a good selling point on the international markets," affirms Lauri Arminen.