The Finnish industrial gases industry is supplied by four companies; the oldest and specialised gas producer and distributor in the country being the Oy Woikoski Ab.
The market was divided for half a century between two companies, AGA (now Linde) and Woikoski. Woikoski produced gas for the end-users located in eastern Finland and AGA in the west. Hydrogen was supplied solely by Woikoski. However, by the end of 1970's the market share-out collapsed and both companies had to reconsider their strategies.
Clas Palmberg, the managing director of Woikoski, considers this particular period of time challenging but also rewarding for the company. He said: 'AGA used to be Woikoski's sole
sales agent and it handled all the sales operations for us in the eastern Finland and their own in the western Finland. Because of historical reasons, Woikoski only concentrated producing and distributing gas, not selling or marketing it. However, the world changed and this wasn't a durable concept anymore and we had to reconsider our strategy.'
Over the last 25 years, Woikoski has been building and developing its own distribution network dramatically. According to Palmberg, the company has the largest delivery network in Finland. The company owns 14 facilities, has 180 sales agents and over 35 000 customers across the country.
Mr Palmberg continued:'We recently measured the extent of the network by the number of resale and filling stations. I can't say we have the biggest but certainly we have got the largest system.'
Woikoski is a family owned private business, its foundations lie in carbon black factory build in 1882, which expanded 1912 into industrial gases. From 1930 -1960 hydrogen peroxide was produced. The 125-year old company was founded by the Palmberg family, Clas Palmberg is the family's fourth generation of ownership and management.
The Finnish company, based at Voikoski near Mantyharju, mainly produces gases for the food, medical, metal and chemical industry, laboratories and sells gas handling equipment, welding equipment and consumables.
With a turnover of 25 million euros the company has about 11-15 per cent of the Finnish market, however, Mr Palmberg claims their share of the market varies depending on how it has been measured.
'Woikoski has got, for example, half of the health care sector's market share and more than a third of the packaged gases in Finland. However, if we look at the whole market including the bulk supplies, Woikoski's share will remain about 11-15 per cent.'
Woikoski is a very unusual company within the industrial gases industry in Finland. It has not got the same pressures such as listed companies and therefore it is able to undertake projects, which would never be even considered by a listed company. Palmberg says that Woikoski's investments from the past 20 years would never have happened if they had followed listed companies' criteria.
Mr Palmberg explained: 'In fact, we have followed a 'script' written by me (in 1979) and all of the projects outlined in it have been carried out by now. Because we are a family business, we are independent and able to explore new ideas and fields of businesses regardless of the profitability expectations.
'Majority of our investments have turned out to be more successful than anticipated. For example, building the automated helium trans-fill and liquefying facility in Voikoski in 2003, certainly wasn't an investment decision with profitability in mind. It was decided to build and develop our know-how in helium. At the moment the plant is doing reasonably well and even exporting products abroad.'
Woikoski also invests a considerable amount of money in the environment around the company's head office, which locates about 200 km south east of Helsinki. Commitment to the local and global environment is in fact one of the company's main principles.
'We have done many projects around the area, such as renovating old buildings and the power plant, that certainly are not profitable. We are also working on a project, which will protect the abundant fish stock in the Voikoski river that provides energy for the business and keeps it self-sufficient.
'It's not beneficial financially but it gives us a possibility to try something new and makes the whole business and managing more pleasant and interesting. Occasionally you also have to do something for fun,' he laughed.
This is only one way Woikoski differs from the main players in the business. Other significant reason, according to Mr Palmberg, is the fact that the company has a very light organisation that enables decisions to be made immediately.
'We employ directly about a hundred people, from which about 40 are based in Voikoski, 16 in Varkaus and the rest spread around the remaining 11 facilities. It's still possible to have personal contacts with our staff on this level. If the numbers were any higher, it would be very difficult if not impossible.'
Competition in the Finnish market is extremely tough, particularly now when there are four companies competing in a relatively small market according to Mr Palmberg.
He said: 'AGA/Linde is the largest in the market. However, at the moment Messer is the most aggressive because it's the most recent entrant in the Finnish market and therefore it is trying to grab a market share.
Then there is Air Liquide (ex Polargas), which has large on-site supply schemes and mainly supplies bulk gases. Polargas used to be part of Kemira and it also has had co-operation with Woikoski.
There has been a big movement going on last couple of years in the Finnish market. All Woikoski's competitors have been sold and have had change of ownership over the recent years and this has caused a shock in the market as well as fighting over the market shares.
Palmberg explained: 'When a gas company has been put on sale, its price is defined according to its share of the market. In order to get the best possible price these companies try to grab as large a share of the market as they possible can before the sale, and this in particular on the expense of profitability. And when it is sold, normally for an overprice, the same happens again under a new management as the expenditures have to be recollected.
'Generally speaking all gas companies have a high degree of know how and most gas companies in the Finnish market are reasonable profitable.'
Clas Palmberg still travels extremely throughout Finland through the year and he visits his premises on a regular basis. 'I used to travel over 200 days a year but in the recent years I have reduced travelling days down to just over hundred.'
The 61-year old CEO is not ashamed of showing off his favourite ways of travelling either. Mr Palmberg's number one choice to visit his customers and offices is by a seaplane or a twin-engine airplane or occasionally with a Saab ex-military trainer.
'Flying has been a family obsession ever since it was possible. It is easy and quick to fly from one place to another in Finland as there are so much uncontrolled air space.
He has also got an impressive collection of old vintage cars such as, Jaguar Racing Roadster 1950, Lotus Super 7 1963, Lotus Elan 1965, Bmw 2002 tii 1970, Marmon 1925,
Chrysler Imperial 1926, Packard 1939 and Rolls Royce 1955, all with extensive racing history and still being raced in national and international events by Mr Palmberg.
Over the last 25 years Woikoski has invested approximately 25 per cent of its turnover, which according to Mr Palmberg is crucial in order to survive. The company has managed to invest without getting into debt and stayed self-sufficient.
The future of Woikoski seems promising. Mr Palmberg once calculated that Woikoski is able to respond only to third of the opportunities offered to the company.
'A big part of the opportunities and chances to develop go by as we haven't got the resources to stretch to everything. This is extremely interesting situation as there is always more interest in the company from outside than it is able to respond to.
'Our aim has never been to reach a particular size or share of the market or a minimum growth in a year. The objectives are mainly to have enough growth to continue investing, which has meant approximately an eight per cent growth in any year. The idea is to build as solid company as possible with a good and stable future.'
This year Woikoski still has two unfinished projects to complete. One is a new carbon dioxide plant in Kokkola and another one is to expand premises in Jarvenpaa, which will replace the Espoo offices, which will be used for sales operations. According to Mr Palmberg there are more and more projects ahead in the future including an extension of the helium plant in Voikoski.
Clas Palmberg is not worried about Woikoski's future and its success story. However, there will be a change in the 'father to son leadership' trend.
'I have got a daughter and a granddaughter so I am sure they will be following me and my fathers' footsteps.'
Text by Katri Iivonen