Delivering on a bold promise, Merus Power grows on the momentum of the green transition
Merus Power, based in Ylöjärvi, has achieved steady growth in recent years. This growth company founded on leading expertise benefits from the fact that the green transition is not slowing down even as global attention is shifting away from the climate crisis.
Five years and twelvefold growth. This was the bold pledge made by the founders of Merus Power in the strategy document that was released when the company listed on the stock exchange. The company set out to grow from a small EUR 6.5 million business in 2020 to an EUR 80 million manufacturing plant in 2026. At the same time, the plan was to make energy storage a second core business alongside industrial energy-efficiency solutions.
“Back then, few believed we could actually do this,” says Kari Tuomala, CEO and co-founder of Merus Power.
Since the IPO, we have delivered on our promise. Merus Power’s net sales have grown by an average of 41 per cent per year, and the pace shows no signs of slowing.
“We are still well within the limits of our promised path. We’ve had some luck, for sure, but not all of it has been chance. We’ve positioned ourselves well for the clean transition,” says Tuomala.
First the people, then the business
For an industrial company, rapid growth is impossible without increasing the number of employees as well. In just a few years, Merus Power has created 120 new jobs – first in research and product development, then in sales, and finally in production and in equipment and system deliveries as sales took off. The company is now the third-largest private employer in its home town of Ylöjärvi.
“You need the people before you can grow the business. Even though we’ve recruited and trained in a proactive way, it often feels like we’re still one step behind. But we have invested as much as we can afford,” says Tuomala.
Rapid growth often comes at the expense of profitability. This was also the case at Merus Power.
“That’s just the reality of the situation. We’ve had to be careful not to lose money. On the other hand, limited resources have forced us to be creative and develop innovative solutions, and that is now one of our strengths.”
Tuomala explains that the company’s growth could have been much faster even before its stock-market listing if early financing rounds had been three times larger. In Finland, investors rarely have the deep pockets that you see in the United States, for example.
Growth first, profitability next
Merus Power’s growth curve still looks healthy, but improving profitability is now a top priority. Tuomala is not complaining, though, because well-managed growth companies often turn profitable too. The global megatrend is still in the company’s favour. The clean transition will continue regardless of one, or even two, terms of President Donald Trump.
The company’s renewable energy storage business is aiming to expand across Europe, helped by unified EU regulation, which makes it easier to enter new markets.
“We already have a project underway in Poland, and we see strong potential in other Nordic countries and Northern Europe markets,” Tuomala says.
Energy-efficiency and power-quality solutions are another key area, especially for the steel industry. The rise of green steel creates new opportunities for Merus Power’s technology.
A third factor that will support profitability is the maintenance business that is expected to double its share to about five per cent of net sales in the next few years.
Profitable growth is not possible without the latest production technologies. Merus Power’s factory in Ylöjärvi has been operating for just two years. Before that, the company occupied the ground floor of Nokia’s old rubber boot factory.
“This factory was built during our period of rapid growth. We developed the products and designed and built the production line without any interruptions or other disruptions for our customers. I consider that an astounding achievement,” Tuomala says.
Made in Finland as a competitive edge
Expanding from Finland to global markets has always been a long and rocky road, but Merus Power knows exactly how to make this journey easier.
“Without question, quality, reliability and comprehensive technical expertise make a difference. We work in deep tech, which is why industries like steel are so eager to collaborate with us. And our products are entirely Finnish, including the software. That’s a strong competitive factor in today’s geopolitical climate,” says Kari Tuomala.
The company has also learned how global politics can affect business. Erratic trade policies can disrupt supply chains. Sustained growth in Russia ended with the war, while China – which was a key market for the company when the pandemic struck – now fiercely protects its own companies from foreign competition.
“Decision-makers in Europe should be told the following – Chinese companies are free to operate in Europe and Finland, but we don’t have the same opportunities to operate in China. Europe still seems naive about this competition,” says Tuomala.
Tuomala also has a message for Finnish decision-makers.
“Finland supports startups well, but financing often becomes a bottleneck just when companies are ready to scale up and internationalise. With a stronger financing base, companies like ours could grow much faster than they do now. Organisations like Finnvera and Business Finland should be provided with better tools to support that kind of growth.”
Finally, Tuomala reminds us of a Finnish peculiarity. In Finland, we have always admired companies that distribute large dividends, and the financial papers then celebrate them every spring. Merus Power is not that kind of company, yet.
“To continue our growth as a Finnish listed company, our top priority now is to improve profitability and deliver solid results. When growth and profitability come together, we will be able to provide our shareholders the best long-term return,” says Kari Tuomala.
Text: Harri Junttila / Photos: Liisa Takala