“We chose development and investment over gradual decline” – Kuopion Konepaja, a company of 30 employees, integrated renewable energy solutions into investments worth millions
A few years ago, Kuopion Konepaja, a company of 30 employees, decided to begin investing EUR 6 million. The company is also investing in renewable energy solutions. Jukka Finne, the CEO, says that the investment has already proven successful. He has three tips for SMEs starting out with investments.
When Kuopion Konepaja decided to invest millions of euros in a new property a few years ago, these sustainable development solutions were integrated into the project.
“For a 30-strong company of our size, geothermal heat and solar panels are sizeable investments,” says CEO Jukka Finne.
The family company’s facilities used to be spread across several properties. Kuopion Konepaja specialises in thermal spraying and machining. Thermal spraying can be used for a wide range of wearing parts, such as wear sleeves. Thermal spraying involves spraying a coating additive onto a surface using a flame. Coating is a way of improving the properties of new parts and repairing worn components by providing them with wear and corrosion resistance, for example.
- Kuopion Konepaja Oy was established in 1982.
- Its business is manufacturing metal structures and components, specialising in thermal spraying and machining.
- Its turnover was EUR 4.5 million in 2022.
- The company employs approximately 30 people.
Finne says that investment was vital.
“If we had continued operating as before, we would have gradually died out. The alternative was to develop. We chose development. It required investment.”
In the current energy environment, the company was attracted to invest in solar panels. The company has safeguarded part of its energy supply in the summer. The new premises are also an investment in the future. They have been in use since 2020.
“We included geothermal heating in the planning phase, and our new premises are suitable for modern operating techniques,” Finne explains.
The company also bought new machine tools.
“If the investment in the new premises had compromised our purchases of machine tools and coating equipment, the green values would have been for nothing. That is why we built our investments around our business, keeping the finished package in mind since the project planning phase,” Finne says.
“We made changes on the fly”
The EUR 6 million investment started in 2018. It should be finished in August 2023. We spent EUR 4 million on the real estate and building and EUR 2 million on equipment and machines.
“This is a huge investment for a company of our size,” Finne says.
The company’s turnover was EUR 3.6 million in 2021. Last year’s turnover was around EUR 4.5 million. The company has grown steadily in the 41 years since Risto Finne, Jukka Finne’s father, established it. The company has never posted a loss, nor has it made a single redundancy for financial or production-related reasons.
“We have developed the company gradually with managed growth. Profitability comes first.”
Jukka Finne’s 3 tips for SMEs starting out with investments
- Plan carefully and assess all the risks and opportunities. Do you really have the capability or opportunity to invest?
- Consult others. If you are concerned about anything or you are starting from scratch, use external expertise. Expert services are available. Even if you have the required skills, an outsider’s view can help you avoid becoming blinkered by your own ideas.
- Be bold. There may be some bumps in the road. Do not be discouraged – keep driving your investment boldly to the finish line. The problems and challenges will be forgotten in a couple of years.
The multi-million investment has already proven successful.
“We have gained tangible benefits from this investment, even though it is still in progress and there have been challenges. Without the investment, we would not have reached this level of turnover.”
Coronavirus was a challenge, as it was for many others. The coating booths and related infrastructure were ordered from India because an Indian company had a ready-made technical solution for the requirements of thermal spraying. However, during the pandemic, the installation technicians could not get a visa to enter Finland, so they could not install the equipment.
Luckily, the company had a backup plan: it could use its old premises for the coating work. Kuopion Konepaja operated in two locations for a year and a half: machining took place in the new premises while coatings were applied in the old location.
“Of course, it made things more difficult, but without this possibility, we would have been in real trouble,” Finne says.
There was no time to wait.
“We made changes on the fly. We are a family business with a flexible organisation. We can make decisions quickly.”
A partner from Joroinen supplied Kuopion Konepaja with two coating booths. The company’s strong financial position helped it cope with the setbacks.
“When the company is managed well and has money in the bank, it is able to react,” Finne says.
The situation also required the personnel to be flexible.
“I would like to thank them. We only make the decisions – the employees do the daily tasks and make it work.”
Finne admits to having a few sleepless nights.
“But now it is nothing more than a bad memory, and even that is fading. All’s well that ends well.”
“A company cannot be forced”
Finne says it is clear that companies must play a part in improving green values and recycling “so we can continue living on this planet”. However, he says that the green transition must be approached as a whole. Financial insight is required in decision-making.
“In principle, a company cannot be forced to do something. Companies are in different positions. Investments must also make financial sense for companies. This is a message to politicians. If companies are forced to do things and suffer because of them, it will not help,” Finne suggests.
Finne says that Kuopion Konepaja aims to operate in a way that does not pollute. For example, the company endeavours to recycle in its thermal spraying work phases whenever possible.
“But geothermal heating and solar panels are major investments for us. In addition, other actions are becoming rather limited.”
Finne says that Kuopion Konepaja’s customers have begun asking more questions about sustainability issues, but there are not yet any requirements in this area.
“Our solutions have been on display in a large, green font,” Finne says.
“I don’t think it will take years before requirements are imposed on us too. Green values are a decision-making criterion, especially for larger companies with strict requirements related to their environmental policies.”
Finne is also pleased that researchers have begun to take an interest in the field. For example, powder coatings made from recycled materials are under development.
Robots will not eliminate the need for employees
Kuopion Konepaja has also invested in robots. The company has five coating cells mainly designed for HVOF coating. Robots can do 99 per cent of spraying. The nozzle is attached to the robot, but the work must be supervised by an operator.
“This also boosts occupational safety. The men no longer need to handle spraying devices, which is very important. They also do not need to be around loud noises,” Finne says.
When the company introduced its first robots 20 years ago, 90 per cent of pieces were sprayed manually, and 10 per cent were done by robots. The ratio is now 1:99. Despite these figures, people are also needed with robots.
In Finne’s view, the biggest challenges at the moment are the availability of materials, price rises, energy challenges, and a shortage of skilled workers.
“Kuopion Konepaja would like to recruit more employees, but they cannot find suitable people.”
“We have been able to address this situation in part with robots and manipulators, but it does not eliminate the need for workers,” Finne says.
The company recently hired an employee directly from vocational school, and another is coming as soon as they wrap up their studies. The company’s existing employees are Finnish or have lived in Finland for a long time.
“In terms of work management, you need to speak Finnish to work here. We do not use temping agencies often. If we get an employee through an agency, we hope they will stay with us for longer than just one shift.”
Finne says that the company has invested in safe, clean and pleasant premises.
“Our employees have said it is a nice place to work. We want people to have every opportunity to do well in their work, and we think about how the work community functions and how to develop so that everyone enjoys working here.”
Finne wishes good luck to the members of parliament newly elected in the spring.
“Hard and painful decisions need to be made to balance the public finances.”
In his opinion, one of the most important goals is to raise the level of entrepreneurship.
“Of course, this means that the foundations for entrepreneurship must be in place. My most important message would be that we need skilled workers. We also need to focus on vocational education.”
Text: Marjo Vuorinen
Photos: Markus Aspegren