1. Growth company
sells its expertise in Asia
Gold
from Karelia
FinNode creates international
contacts
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2. Editorial Contents 1/2010
Photo: Peter Mattersdorff
Aiming for productivity
and world-class expertise 2 EDITORIAL
In Finland’s innovation strategy, boosting national wellbeing is based
on innovations that support sustainable development and on improving
8 4–7 LATIN AMERICA ATTRACTS INVESTORS
A prospering middle class and a young population
productivity. is an attractive equation for investors, according
to Cate Ambrose, Executive Director of the Latin
New reports set sweeping objectives. How can we once again become an American Venture Capital Association (LAVCA).
information society leader? How can we restructure the public sector and
enhance its efficiency? How can we improve the activities of the Finnish
innovation system so that we support the creation, growth and international FINNODE SENSES FUTURE TRENDS
8–11 Finland’s FinNode network in the USA, Russia,
Photo: Kari Ylitalo
expansion of as many new companies as possible?
China and Japan networks local and Finnish
Photo: Pentti Potkonen
innovation business.
Operations must be more international. The FinNode network is a significant
step towards international networking. It helps Finnish companies enter new
markets, reinforces the visibility of Finland’s innovation activities, and attracts
Photo: Lacell
foreign companies to Finland. In this issue, leading figures in the FinNode
12–15 SILECS GROWS ON THE
ASIAN MARKET
network in America’s Silicon Valley and in Russia, China and Japan tell us
about their services and the discernible market signals there. 20 16 The Finnish company’s
flexible model challenges
its big global competitors.
4 12
Photo: Greg Martin
A growing proportion of Industry Investment’s activities are international, and investing often focuses
on international expansion. One example of this is Silecs, an Espoo-based manufacturer of specialty
chemicals and coating materials that operates in the rapidly growing Asian market. 16–19 GOLD FEVER IN KARELIA
Endomines’s Pampalo gold
mine will bring new jobs to Ilomantsi.
Many industrial localities suffer from global restructuring. State participants play a key role in creating
new business and new jobs. We introduce two industrial portfolio companies: ecofriendly nonwoven
fabric manufacturer Lacell, and gold mining firm Endomines.
20–21 ECOFRIENDLY NONWOVEN FABRIC
FROM FINLAND
In Latin America, more companies and experienced investors from Finland are needed in the market. Lacell’s newly constructed mill
Cate Ambrose, Executive Director of the Latin American Venture Capital Association, says that inves- will start production in spring.
tors around the world are investing in sectors that feed demand from the continent’s prospering middle
class – health services, construction, entertainment and the retail industry.
22–23 VIEWPOINT
In the recent corporate image survey, Industry Investment was rated highly for the confidentiality of Seed investing – investment
cooperation, expertise, and social responsibility, while respondents saw more room for risk taking. or innovation policy?
I thank our partners for the past year
Cover photo: Juha Salminen
and wish everyone a Happy New Year! 24–25 CORPORATE IMAGE
Industry Investment’s
corporate image
Juha Marjosola survey 2009
President & CEO
25 APPOINTMENT
PUBLISHED BY FINNISH INDUSTRY INVESTMENT LTD, KALEVANKATU 9 A, P.O. BOX 685, FI-00101 HELSINKI, 26–27 NEWS
FINLAND, TEL. +358-9-680 3680, FAX +358-9-612 1680, FIRSTNAME.LASTNAME@INDUSTRYINVESTMENT.COM, WWW.INDUSTRYINVESTMENT.COM
| EDITORS-IN-CHIEF JUHA MARJOSOLA, ASTA SJÖBLOM | PUBLISHER SANOMA MAGAZINES FINLAND CORP., CUSTOM PUBLISHING,
| EDITORIAL STAFF TAPIO KIVISTÖ, EEVA-MARIA LIDMAN | TRANSLATION PETER SALTER | LAYOUT PIA HYTÖNEN | PRINTED BY PAINOYHTYMÄ OY 2009
28 INDUSTRY INVESTMENT IN BRIEF
| ISSN 1796-0266 ADDRESS CHANGES TESI@TEOLLISUUSSIJOITUS.FI
2 Industry Investment 1/2010 Industry Investment 1/2010 3

3. Text: Varpu Sihvonen | Photos: Alamy, Greg Martin and iStockphoto
W
The Latin American venture capital market is more enticing than ever. hy is it worth and spending of the middle class than industrial countries’, and
investing in is constantly increasing. The popu- the region has huge commodity
Cate Ambrose, Executive Director of the Latin American Venture Capital Latin America? lation’s average age is low, so there and agriculture reserves. This has
will be plenty of consumers in the prompted many international inves-
Association (LAVCA), nevertheless recommends that investors study the
Investors are future. In Brazil and Mexico, for tors to investigate for the first time
local market carefully first, or cooperate with experienced funds. interested in areas and countries instance, the average age is less than investment opportunities in Latin
that they think have good future 30 years. America.
prospects and steadily growing
GDPs. In Latin America, the size
Latin America’s gross domestic
product (GDP) is growing faster
There is no doubt about whether
investors would have noticed Latin »
Investors set “ The region has
huge commodity and
agriculture reserves
”
their sights on
Latin America
4 Industry Investment 1/2010 Industry Investment 1/2010 5

4. America’s development over the last Venture capital’s biggest challenge remember that some 90 per cent of Companies in Latin America
decade. The region’s biggest states are in Latin America? companies are family-owned. need foreign capital. Venture capital
now politically stable and economi- is viewed in a posi-
“
cally well-managed. Investment is still new but future tive light, and has
Latin America has also managed experiences will be closely watched. Investors’ money political support.
well in the global financial crisis, The region lacks funds that have been
thanks to its well-regulated banking active and successful over the last will be in a key role What kind of
system. decade. For instance, in 2008 some when the younger cooperation do
4 funds accounted for 85 per cent of generation modernises you expect with
”
Which sectors are on the rise? the region’s fundraising. Finland?
Fortunately, this is being rectified, inherited businesses
Consumer markets – especially helped by local pension companies in Finland is one of
healthcare and education – are the Peru, Columbia and Brazil starting to the wealthy coun-
most popular, because the prosper- invest. Pension funds have been able tries, and home to
ing middle class can afford health to raise funds and thus to chart their Older generations may no longer experienced investors who know
and education services. Generally, experiences. want to continue in the business. their business. As I see it, European
the attractive sectors are those that The exit process is challenging in They will hand over responsibility investors think of the future, actively
meet the needs of young middle- Latin America, because Mexico, Peru to their children, many of whom seek new prospects, and are therefore
class families: healthcare, construc- and Columbia do not have stock have been trained in economics in interested in Latin American invest-
tion, entertainment like funfairs exchanges like Brazil does. Finding the USA. Younger generations have ment opportunities. I think Finland
and casinos, consumer goods, and a buyer has not always been easy, travelled more and have ideas about belongs to that group.
the retail sector. Funds from around and bad experiences may scare off how to run a company. Changes will
the world have invested in these investors. not happen overnight, but investors’
sectors. Singapore, for example, is money will be in a key role when the
an active investor in Latin America, How can LAVCA help investors? younger generation modernises these Cate Ambrose, LAVCA’s Executive Director.
and China is looking for long-term
opportunities. Collecting and acquiring informa-
inherited businesses. www.lavca.org n
There are indeed investment op- tion has been difficult, and we can
portunities, but funds must know help there. We have started com- Latin American Venture Capital Association
how to invest in Latin America. piling data about VC investments LAVCA
There is not so much competition in Latin America. The first report
in the region as in China or In- was conducted in 2008, when 150 Brazil is a growing trade partner for Finnish companies n Founded in 2002, office in New York
dia, and in that sense investment funds gave us information about
prospects are easier to find when fundraising. We summarised the n Finland’s exports to South and Central America amountedexports.
to n Members consist of 60 international and local
venture capital firms.
MEUR 1,582 in 2008, representing 2.4% of Finland’s total
you are not up against dozens information in a book and – judg-
of other competitors each time. ing by demand – this information n Finland’s imports from South and Central America amounted to
MEUR 1,675 in 2008, representing 2.7% of Finland’s total imports.
n Executive Director, Catein UN positions in Latin America,
She has earlier worked
Ambrose.
Another important factor is that is needed. management tasks for The Economist magazine,
an investor must know the local Some of our publications can be n Finland’s biggest600 worth of products toAmerica is Brazil. Finland
exported MEUR
trading partner in Latin
Brazil in 2008, an increase
and as a journalist in Spain.
market and have an on-the-spot downloaded from our website, some of 25% on the previous year.
representative. First-generation must be ordered.
investors in the mid-1990s made – Finland’s main exports to Brazil were paper as well as
machinery & equipment, such as telecoms hardware. Finland’s chief
the mistake of operating from New How do you see the future? imports are pulp, food products, raw materials, ethanol and planes.
York, or Dallas – in fact, from any-
where except in Latin America. It For fundraising, 2009 was a difficult – The Brazilian operations of Finnish companies generated net sales
of EUR 2.7 billion.
is essential to recruit local experts, year. I believe, though, that 2010
maybe open a local office, and find will be good for fundraising and that – Finnish companies employed some 20,000 people in Brazil.
local partners. An investor must institutional investors will again be
– Finnish companies operating in Brazil include: Ahlström, Stora Enso,
have a physical presence or acquire more active. Metso, Ponsse, Pöyry, Outotec, Wärtsilä, Elcoteq, Nokia, and PKC Group.
local partners. With Latin America, you must
Sources: Finpro, Customs, and Finland’s Ministry for Foreign Affairs
6 Industry Investment 1/2010 Industry Investment 1/2010 7

5. Photos: Dimitri Lovetsky, Peter Mattersdorff, Qilai Shen and Dino Vournas
JUKKA SALMINIITTY contacts should be quickly created. Silicon promise to customers, partners or investors,
FinNode USA, Silicon Valley Valley is very international: over 50 per cent and how to present it in 90 seconds. Also,
of growth companies’ CEOs were born out- we’ve built up cooperation with the Plug
1. FinNode’s background organization con- side the USA. An effective venture capital & Play Tech Center business incubator that
sists of Finpro, the Finnish Funding Agency market is a definite advantage. operates in Silicon Valley, so companies can
for Technology and Innovation (Tekes), go there for a month to survey the market
Sitra (the Finnish Innovation Fund), and 4. A company should first understand a and to network. One Finnish company
the Academy of Finland. Together with cor- market opportunity and then, supported went there to chart potential customers,
porations and strategic expertise clusters, it by a local network, survey the actual partners and financiers. Within a month
looks to us for a view of future trends and needs of customers. The best way to do the company found some important open-
links to local centres of excellence, such as this is through discussion with notewor- ings to leading companies in its field, and
Stanford University and the University of thy customers, partners and competitors. launched its services very successfully and
California. Growth companies and the do- The important partners in this phase are with high media visibility.
mestic networks serving them seek a better business incubators, service providers and
market understanding and tools for market financiers. 7. Developed and well-organised Finland
entry. To meet this demand, this year we’ve could function in the future as a test market
started the Gaselli USA Program. 5. Monitoring and understanding of the for global suppliers. Interesting possibilities
market are often deficient. Strong inter- for this in the Test Bed Finland project are
2. Customers come to us through national national competition has raised the bar. mobility, health and wellbeing, and train-
programmes and big cooperation projects. A company should be able to explain the ing.
That enables us to serve a larger number added value it produces, from the custom-
of players with limited resources. Dozens er’s viewpoint, in just over one minute. Dif- 8. Social media and their widening use as
of Finnish companies visit Silicon Valley ferences in business cultures are also bigger a business culture tool. A breakthrough in
each year, mostly from ICT, cleantech than you might think. Market entry should wireless broadband and the mobile eco-
and service business sectors. New business be handled as a strategic investment, because system. Rapid growth in green technology
Jukka Viitanen, FinNode Japan, Tokyo models and innovation models also interest success requires expertise and products to (including clean energy, energy saving,
companies. be crafted to match local market demand. green construction, and advanced vehicle
Solving a problem is what’s important, not technologies). There’s considerable develop-
3. Silicon Valley is typically very customer- just sophisticated technology. ment also of innovation models (including
oriented, demand driven and quick to react open innovation, social development, and
FinNode
to detected opportunities. Widespread 6. The Gaselli Program developed by Fin- experimental innovation).
networking, and open sharing of informa- Node prepares rapid-growth companies
1. Which of your services have
grown fastest? tion and contacts are crucial. Activities are for what to expect in Silicon Valley. How
very results-oriented, and added-value for to construct a market-oriented value-add TIMO KOPONEN
2. Number of customers and FinNode Russia, St Petersburg
their sectors?
1. Our objective is to ascertain ways to
3. Typical characteristics of the make Finnish companies competitive on
local business environment the Russian market in 3–5 years’ time. We
and culture?
analyse developments and market signals
guides companies to the right market 4. Main local networks
– who and what to know?
in the Moscow and St Petersburg areas.
As the result of our work, each year we
present some research projects for launch-
5. Biggest challenges for Finnish ing.
companies in your country?
2. Our customer groups are FinNode’s
The FinNode network operates in China, Russia, the USA and 6. Recent example of client background organisations, centres of ex-
company’s problem and pertise, and expertise clusters. There are
Japan. FinNode helps Finnish companies enter markets, reinforces its solution?
13 clusters in the Centre of Expertise
programme, in which some 8,000 Finnish
the visibility of Finland’s innovation activities, and attracts foreign 7. How best to attract your
companies operate. In 2008 we explored
country’s companies to Finland?
companies to invest in and pilot operations in Finland. The heads new business models arising from develop-
of FinNode centres each tell us about their country of focus.
8. Your forecast for rising
signals in 2010?
Jukka Salminiitty, FinNode USA, Silicon Valley
ment of Russia’s wellbeing services. We’re
also exploring the competitiveness »
8 Industry Investment 1/2010 Industry Investment 1/2010 9

6. of Finnish construction in the local market. regard to the forest industry, despite the often over before Finnish companies have
In addition, we’re investigating how the recent debate about timber export tariffs. time to react.
recession has changed the Russian ICT
market and what possibilities that offers JAANI HEINONEN 4. In addition to your own customer and
companies. The fourth topical sector is FinNode China, Shanghai supplier network, it’s important to know
Russia’s rapidly modernising automotive which officials affect your operations.
industry. 1. FinNode China’s strength is good net-
works with the public science and tech- 5. The positive challenges include managing
3. Russia is an economy of regions and net- nology sectors. China is a society run by the market’s rapid growth and by doing so
works. When entering the market, it’s es- officials, so it’s important to identify the meeting demand. Negative challenges relate
sential to join some network. For example, officials affecting your own operations and to Chinese companies’ growing in-house
in the ICT sector it’s good to link up with be able to utilise Finland’s official repre- knowhow and the intense competition on
a local partner that operates in the same sentatives, such as the Ministry for Foreign the Chinese market.
sector and is already in the business. Affairs, Tekes and Finpro.
6. A Finnish company was the subject of
4. As above. 2. We operate in cooperation with the false allegations made by a Chinese com-
FinChi Innovation Center, which is owned pany, which started adversely affecting
5. The biggest challenges are arranging by Finpro, via which companies can also use day-to-day operations. The local officials Jaani Heinonen, FinNode China, Shanghai
placement in the market and production. FinNode China’s services. FinChi has col- did not at first take the matter seriously,
The competitiveness of Finnish export laborated with over 40 Finnish companies, so the Finnish company asked us for help.
prices has suffered due to a strong euro and and at present over 20 Finnish companies Since we have good relations with the area’s environmental problems in China opens up 3. Japan is still ahead in services for ubiq- SMEs looking for results that will quickly
weak rouble. By manufacturing products are exploring their business opportunities highest officials, we managed to calm the opportunities also for Finnish technologies. uitous computing and implementing these lead to business.
in Russia, a company can safeguard its on the Chinese market. The biggest sectors situation so the Finnish company could China is developing into the world’s leading services. Tokyo contains a lot of people in
competitiveness. are ICT, environmental technology, and the once again concentrate on its business. user and developer of energy technology. In a small area, and it’s easy
“ When entering
metals and engineering industry. China, 3G mobile technology was late to to roll out trials of solu-
6. We selected two innovations, which were 7. Nokia is very well known in China, and market. Consequently, it will only be an tions that will interest the
interesting products for Finnish companies, 3. In China nothing is easy, but everything Finland is seen as a hi-tech country with un- intermediate phase, because China is now consumer in such an en- the market, it’s essential
to join some network
”
from an innovation competition held in is possible. On the surface, things may seem spoilt countryside. Technology firms could investing directly in 4G technology and vironment. One example
Russia. One is a pencil that can measure clear but many different challenges can be be enticed to Finland that would bring their applications derived from it. is the train fare payment
blood sugar. Patient data is sent by mobile hidden in the background that need time expertise to western markets by setting up system that combines
phone to a doctor, and the doctor promptly and understanding to address. Operating R&D operations in Finland. Finland’s JUKKA VIITANEN a mobile phone and a
sends care instructions back. The other in- here demands a long-term approach and competitive edge in attracting investment FinNode Japan, Tokyo near-field communication card. Millions 6. FinNode Japan was established only a
novation is a biological method for clean- strategic commitment. Despite China’s is a sophisticated innovation environment of these are used every day. There are good year ago and is so new that we have no
ing oil-contaminated soil. We’ll develop breathtaking growth figures, very rarely is that is open to foreign players. grounds for investing in the construction examples to offer.
both projects with Technopolis Ventures a success story born in a couple of years, 1. We collect signals that indicate market of this type of ecosystem.
and find out whether Finnish partners are and results may take 3–5 years to achieve. 8. China’s innovation ability is growing change, report on them to our background 7. Finland should be offered to foreign
interested in them. Good business opportunities are constantly stronger more quickly than the rest of the organisations, and produce data for compa- 4. Finnish companies should know the companies as a test market. This would be
opening up in China, but the situations are world realises. Addressing the enormous nies to use. So far most of the collected data services offered by Finns in Japan. The an excellent way to convince international
7. A lot of innovations are born in Russia, is used in the work of the Finnish Funding Finnish Chamber of Commerce is active in companies that it would make sense to
but they are not ultimately utilised very Agency for Technology and Innovation Tokyo, and offers expert guidance on how conduct pilot-sized market trials in Fin-
Timo Koponen, FinNode Russia, Moscow
well. In Finland the opposite is true: our (Tekes), Finpro, the Technical Research Cen- to operate in the country. Finpro and JET- land. Also we have both public and private
innovation system is effective, but we lack tre of Finland (VTT), and Sitra (the Finnish RO (Japan External Trade Organization), organisations that can provide services for
good ideas. We’re currently thinking of ways Innovation Fund). Finpro has productised among others, offer free market reports and such projects.
we could attract Russian innovations to the service for some of its key customers. office premises during a company’s reloca-
Finland for productising and commercialis- tion phase. 8. A new type of media society is emerging.
ing with a Finnish partner. If an innovation 2. In particular, we monitor developments of Japanese companies are seriously testing
proves to be interesting, the partners could ubiquitous computing and mobile services. 5. When they come here companies must how a consumer can be approached via
set up a company in Finland, and obtain Our second theme is ICT solutions devel- be prepared for market entry to take a media using sensor technology and mobile
both Finnish and EU funding. oped for home care and a care environment long time. The Japanese decision-making solutions.
for an ageing population. In addition, we’re culture differs from other countries’ in
8. In 2010 we’ll focus on studying the interested in consumer trends in lifestyles that very thorough background checks of
rapidly changing ICT sector and social of health and sustainability (LOHAS) and all partners and customers are conducted
networks. We must also look ahead with LOHAS consumers. here. This is a big challenge, especially in www.finnode.fi n
10 Industry Investment 1/2010 Industry Investment 1/2010 11

7. A process technician places silicon
wafers into a diffusion oven in
Silecs’s Espoo plant. The oven
is used in manufacturing model
wafers and in the quality control
of products.
In Teo’s view, the whole sector has
a bright future because the global
The materials of Silecs products are
Silecs
market for chemicals and materials photosensitive, so filtered light containing many
needed by the electronics industry is shades of yellow is used in production.
forecast to reach the EUR 20 billion
mark next year.
“Silecs has good prospects for
becoming an international front-
runner as we systematically pursue
our targeted business strategy. Our
goal is to reach annual turnover of
MEUR 200 by the end of 2015,”
becoming an international frontrunner
promises Teo.
Silecs’s technology enhances the
performance, picture quality, colour
shading and service life of flat-panel
TVs, digital cameras, solar cells, LED
applications, and memory cards for
consumer electronics. The technol-
“B
ogy reduces power consumption and
Specialty chemicals and coating materials manufacturer Silecs has this year won usiness cycles simplifies the manufacture of micro-
have actually circuits, which cuts production costs
five major contracts to supply international manufacturers of semiconductor and helped our and retail prices of end products.
company to
microcircuit technology. Silecs’s technology improves the performance and durability grow. Our RAPID ADAPTABILITY
of, for instance, digital cameras, flat-panel TVs and memory cards. operating model is based on speed, GIVES COMPETIVE EDGE
flexibility and cost-effectiveness.
Our patented technology enables “Our competitive edge derives from
our customers to boost their produc- solutions tailored for the customers,
tion and enhance the performance which are implemented cost-effec-
Text: Olli Manninen | Photos: Munshi Ahmed, Juha Salminen and IStockphoto
of their end products,” says Silecs’s
CEO Kok-Whee Teo.
tively, flexibly and ecologically,” says
Teo. »
12 Industry Investment 1/2010 Industry Investment 1/2010 13

8. “ The whole sector
has a bright future
”
“I was interested in taking over the their part, are very systematic, but
helm of the company because it of- not necessarily creative enough in
fers its customers good technology, development tasks.”
solutions and production.”
Singapore-born Teo describes his SALES AND MARKETING
job of managing a Finnish company ARE THE SHOWCASE
as inspiring and satisfying. Teo has
found it easy to assimilate Finnish Established in Espoo, Finland, in
ways of working, and communica- 2001, Silecs’s roots go back to re-
tion with Finns has been straight- search work conducted by the Tech-
forward. nical Research Centre of Finland
“I’ve worked in different coun- VTT that focused on reducing the
tries in numerous international size of microcircuits and improving
companies, and also with Finns, the quality of end products by means
during my career. From experience of new materials. The company’s
I can say that experts from different product and technology solutions
countries blend into the company’s now have over 30 patents or patents
own work culture fairly easily, de- pending worldwide. The company
spite national differences. A good was awarded the InnoFinland Prize
manager can infuse his or her team of the President of the Republic in
with the company spirit and get 2006.
people involved. Silecs’s employees In 2008 Silecs received a MEUR
are motivated to work both as a team 6 investment from Swedish Innova-
and as individuals.” tionsKapital, British Tempo Capital
Silecs currently employs 35 people. company’s carefully crafted operat- Silecs’s model combines the best Partners and Finnish Industry In-
The company’s R&D and plant are ing model. features of both Finnish and Asian vestment.
located in Espoo, Finland, while “We are where our markets are. working cultures. Kok-Whee Teo believes that the
management and sales are concen- Through our network we can adapt “Finns are very creative and com- involvement of private equity in-
trated in Singapore, Hong Kong and quickly to our customers’ require- mitted to their work. Asians, for vestors gives much more muscle to
Taiwan, close to the main markets. ments.” strengthening the company’s sales
The company also has extensive and marketing.
cooperation in Japan as well as sales CREATIVITY AND EFFICIENCY “A technology company’s big-
agents in Europe and the USA. SUPPLEMENT EACH OTHER gest challenge is to sell its expertise
Silecs’s effective networking model to customers in an attractive way.
allows the company to serve its cus- Kok-Whee Teo, who was appointed Alongside engineering excellence,
tomers around the world. CEO of Silecs just over a year ago, a successful company needs just as
“Although competition in the has a long career in the international much excellence in marketing and
Kok-Whee Teo, microelectronics industry is very in- electronics industry behind him in, Silecs’s products improve the the ability to understand the needs
CEO, Silecs performance, picture quality, colour
tense, this year we’ve won a number for example, Texas Instruments and of the global operating environ-
shading and service life of flat-
of new contracts,” says Teo. Molex. panel TVs, digital cameras, solar ment,” says Teo.
The competition includes major He says he brought solid manage- cells, LED applications, and memory
global players, but Teo believes in his ment and sales expertise to Silecs. cards for consumer electronics. www.silecs.com n
14 Industry Investment 1/2010 Industry Investment 1/2010 15

9. Text: Pekka Moliis | Photos: Pentti Potkonen and Endomines Ab
S
The whole area, which while the concentration plant will of Employment and the Economy
suffers from high un- operate around the clock in three granted MEUR 2.5 development aid
employment, has been shifts. to the project from structural funds
keenly interested in the The price of gold is currently in the Eastern Finland Programme.
mining company even slightly over USD 1,000 an ounce. “Total investments amount to
before the decision to open the That is high enough for Pampalo’s MEUR 20. The rest is needed to
mine. Once operations start, some profitable operation. The present launch operations in the starting
Endomines’s CEO Markus Ekberg (right) and geologist Jaakko Liikanen.
70 people are expected to be on the price of gold is 20 per cent higher phase,” says the CEO.
payroll. As in many other mining than the price used in the feasibility One of the investors in the gold
projects, the company will train the calculations, and covers direct pro- mine is Finnish Industry Investment
personnel it needs itself. duction costs twice over. Ltd.
Markus Ekberg, who started “Industry Investment has made a
Gold at last!
as CEO of Endomines Ab at the SHARE ISSUE ONE STEP significant contribution towards im-
beginning of August, says that the ON THE PATH plementing the project,” says Jaakko
company has now started the ball Liikanen, founder of Endomines.
rolling. The global recession has frozen many Industry Investment made its first
“Recruitment training started in mining projects. The Pampalo gold investment in 2003 in Kalvinit Ltd,
December. We’re co-training proc- mine is the first of Finland’s ‘new which planned to quarry ilmenite in
ess minders and mine workers in wave’ mine projects to move ahead the Kälviä area. Kalvinit later merged
collaboration with the employment since the downturn. with Endomines.
authorities.” Endomines is seeking mine fi- “Industry Investment’s role as a
According to the plans, some nancing of MEUR 28 from various long-term investor has been vitally
230,000 tonnes of ore a year will sources. A share issue will raise some important to Endomines, because
A long-term dream will come true when Endomines Ab opens the Pampalo gold mine in be mined at Ilomantsi, from which MEUR 16. A project loan of MEUR it has made follow-on investments
autumn 2010 at Hattuvaara in Ilomantsi, Finland. The new gold mine is a major event for about 1,000 kilograms of gold will 8 is being negotiated with Nordea during the mining company’s critical
the whole area. The year-long construction phase will employ up to 100 people.
be extracted. Gold ore will be mined
5 days a week in two 10-hour shifts,
Bank, of which Finnvera will guar-
antee MEUR 6. Finland’s Ministry
stages,” explains Tuomo Mäkelä, one
of Endomines’s board members. »
16 Industry Investment 1/2010 Industry Investment 1/2010 17

10. The Pampalo mining concession covers an area of approx.
300 hectares, and the mining area approx. 100 hectares.
“Follow-on investments in En- ing ahead,” says Markus Ekberg. “An “There are two other deposits financed by the proceeds of test min- mine. In 2007 the side drift was
domines have supported the parent extraordinary general meeting will nearby that we can utilise here. All ing,” says Ekberg. extended by 100 metres.
company’s wider business develop- make the final decision, but contract the known ore reserves will support Endomines was founded over “The mine pumps have continu-
ment, so it was consequently feasible negotiations will be started imme- over seven years of operation. a decade ago by geologist Jaakko ously been extracting water from
to support the Pampalo gold mine diately. During the autumn a sand Liikanen and Doctor of Technol- the depths of the mine. Luckily the
project,” says Mäkelä. precipitation pond and concentra- PROJECT STARTED ogy Timo Lindborg.
“
On an international scale the Pam- tion plant were constructed. We’ll try Endomines Oy and
palo gold mine is a small project. to get work moving quickly before
DECADES AGO
Kalvinit Ltd were Our faith was tested.
“Preparation for the share issue winter sets in,” explains Ekberg. A lot more is needed to start a gold later listed on the If it had wavered, this project
would not have been started
”
has not been easy. It should be a The forest has been cleared to mine than faith that ‘there’s gold First North list of the
much bigger project to attract the make room for the precipitation out there’. Soil testing stated in Stockholm Exchange
attention it deserves. Getting a bank pond. Next is a massive earthworks Pampalo back in the 1980s. The as a part of the En-
loan was an achievement in itself operation. A crushing plant, office Finnish government tendered out domines AB group.
in today’s business climate,” says premises and service buildings will the deposit to Outokumpu Cor- Endomines Oy is a
Markus Ekberg. Markus Ekberg, also be erected on the site, and a new poration in 1994. In 1996 open- Finnish company domiciled in Ilo- pumps were not stopped, because
CEO of Endomines electricity supply line built. face mining was started, which mantsi, Finland. renovating a waterlogged mine would
GOLD IN FIVE YEARS “Test runs will be made in Octo- produced good results. A couple Despite good results, Outokumpu be a huge job,” says Ekberg.
ber 2010 and actual production will of years later a side drift 2.5 kilo- did not open a mine, because the “Our faith was tested. If it had
Endomines’s CEO Ekberg and ge- start in early 2011,” adds Ekberg. metres long was bored. company had decided to wind down wavered, this project would not have
ologist Liikanen are convinced of the trating have been carried out at the The known ore reserves of the “Outokumpu’s test quarrying all its mining operations. Endomines been started,” adds Liikanen.
project’s success. mine. Our biggest challenge now is Pampalo gold mine will last five years produced some 1,600 kilos of gold. acquired control in 2006, and since
“Test mining and test concen- keep the work on schedule and mov- – with more to come. The work cost MEUR 10 and was then has invested MEUR 3.5 in the www.endomines.com n
18 Industry Investment 1/2010 Industry Investment 1/2010 19

11. Text: Outi Airaksinen | Photos: Jani Sourander
Nonwoven
ry times and excessively large delivery for a municipality in which a new
batches. We will try to be a medium- production plant will generate not
sized, flexible and service-minded only badly needed jobs but also tax
supplier to small and medium-sized revenue. After recession and restruc-
customers,” says Tamminen. turing, the economic area has no
wipes clean
Tamminen points out that the shortage of skilled labour. When
market for Lacell’s nonwoven fabric Lacell advertised for 12 employees
has grown annually by 7–15% more to start up production, over 500
than that for competing products. applications were received.
One applicant for training is 32-
A NEW PRODUCT IS BORN year-old Tero Nakko from Kouvola,
who had recently received the first
The foundation for airlaid expertise permanent job as training officer at
was laid in the early 1980s in Finland the Sunila pulp mill.
when UPM- “Redun- Lacell’s production premises
S
Kymmene’s dancies were
“
will be completed next spring.
Situated in the Northern
Kymi Valley in Finland,
Construction of Lacell Oy’s mill in Iitti predecessor,
United Pa-
Employment in announced
at Sunila in
Lacell’s nonwoven fabric is nearing completion. Next spring the per Mills, the paper business early April.
mill will employ an esti-
modern production line will manufacture was granted is today much the Lacell was
mated 40–50 people in a patent for recruiting at
same as winning
”
spring 2010, in an area that a few pulp-based nonwoven fabric for hygiene manufactu- the same time
years ago lost hundreds of jobs as ring paper the lottery it was decided
a result of the Voikkaa paper mill and tabletop products. without to close the
closure. The new production plant using water. Sunila mill,
will also indirectly create jobs in After de- so I put in an
maintenance and financial admi- velopment and testing, a product application. Employment in the paper
nistration. corresponding to soft tissue was business is today much the same as
“From our viewpoint, the impor- created and named Walkisoft. The winning the lottery,” says Nakko.
tant factors in situating the mill here product was first manufactured in Nakko, who graduated from po-
were good connections to seaports Kotka, Finland. Risto Tamminen as lytechnic with a paper technology
and the proximity of our largest cus- well as Lacell’s current sales manager degree, has held a variety of fixed-
tomers,” explains Lacell’s Managing packaging, filters and hospital wi- A LOCAL AND FLEXIBLE and shareholder Tervo Karvonen term jobs in his career, including
Director Risto Tamminen. pes. The absorbent material has wet SUPPLIER were involved right from the start in working at UPM’s Kymi mill and at
The production line will start up strength and is lint-free, so it is ideal In line with its strategy, Lacell manufacture of the new product. Myllykoski. He also has experience
in the spring working two shifts, for cleaning hygienic premises. offers nonwoven fabric to compa- Although considerable sums of repairing paper machines.
but during 2010 will switch to three Lacell’s nonwoven fabric is an nies that operate in the Baltic region were invested in developing airlaid Regardless of his experience and
shifts. eco-friendly alternative compared – and especially in Russia. Letters of technology in the 1980s, UPM machine fitter qualifications, Lacell’s
“Operation should be on a stable to competing plastic–based mate- Intent have already been signed with decided to shed some functions future process and shift boss has to
footing in 2011, when we expect to rials, because the raw material is a number of customers. Tamminen and withdraw from Walkisoft. The study along with the company’s other
operate at one-third capacity,” says mainly renewable Finnish pulp. believes there is plenty of room in company’s special paper unit kept recruits. A five-month course jointly
Tamminen. The material can be incinerated for the market for local production that Raflatec, which made adhesive paper tailored with Kouvola Vocational
One year ago Finnish Industry energy, and probably also recycled as focuses on serving SMEs. laminates, and airlaid materials were Adult Education Centre prepares
Investment Ltd co-invested MEUR insulation. Since water is not used Lacell does not really have any sold to America. the recruits to face new challenges.
4.6 in the construction of Lacell’s in the production process, there are competitors in Finland. The eco- After a while, urged on by their The course is held in the premises
mill, together with Midinvest Mana- no wastewater problems in manu- friendly airlaid material is a com- customers, the Finns decided to test of both an equipment manufacturer
gement Oy and private investors. facturing. petitive alternative to plastic-based the viability of local production once and a raw material supplier, where
“A large proportion of products nonwoven fabric in terms of both again. the future work can be tried out in
AIRLAID – NO WATER will go to hospitals and nursing ho- price and properties. Large manu- advance and in practice. The course
mes, as well as to agriculture, where facturers in Germany and Sweden, TAILORED TRAINING also covers occupational health, hy-
Lacell will manufacture nonwo- demand is stable. The market needs on the other hand, serve large cus- FOR EMPLOYEES giene, forklift driving practice, and
ven fabric from pulp using airlaid better and more advanced disposab- tomers. first aid skills.
technology, for use in hygiene le materials that are environmentally “Small customers have not been The resurrection of a special field Instructor Sami Vällilä (left) advises
Janu Juuma on how to operate a forklift.
products, napkins and table covers, friendly,” says CEO Tamminen. satisfied with large suppliers’ delive- of the forest industry is good news www.lacell.fi n
20 Industry Investment 1/2010 Industry Investment 1/2010 21