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Managing practise and networks’s in FI and Baltic countries STROI – seminar 16.4.2008 Hämeenlinna Petrus Berg/ Puumerkki Oy.

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Presentation on theme: "Managing practise and networks’s in FI and Baltic countries STROI – seminar 16.4.2008 Hämeenlinna Petrus Berg/ Puumerkki Oy."— Presentation transcript:

1 Managing practise and networks’s in FI and Baltic countries STROI – seminar Hämeenlinna Petrus Berg/ Puumerkki Oy

2 Presentation/Kirsi Kekomäki Puumerkki Group In brief Building materials wholesale chain specialising in wood based products and serving building contractors, retailers and industry in Finland and Baltic countries Part of StoraEnso Group; subsidary of StoraEnso Timber Oy Ltd. Group sales 350 MEUR (260 Finland), employees 230 (200 in Finland) –13 outlets in Finland –1 outlet each in Estonia, Latvia and Lithuania –business plan under review for Russia (St. Petersburg) Main developments –New improved facilities in Joensuu – Spring 2006 –Logistics Center fully integrated to Honkalahti sawmill – early 2007 –New improved facilities in Kotka – Autumn 2007 –Opening a new terminal in Tallinn – January 2008 –Relocation from Kauhajoki to Seinäjoki – during 2008

3 Presentation/Kirsi Kekomäki Puumerkki Group Key figures by region, 2008B Tallinn Riga Vilnius Oulu Kauhajoki Turku Kerava Kotka Honkalahti Joensuu Kuopio Pori Tampere Lahti Jyväskylä Mikkeli Puumerkki Oy, Finland 13 outlets Personnel 200 Turnover 260 MEUR Puumerkki AS, Estonia Established 1997 Personnel 15 Turnover 62,5 MEUR Puumerkki SIA, Latvia Established 1999 Personnel 11 Turnover 20 MEUR Puumerkki UAB, Lithuania Established 2005 Personnel 7 Turnover 14 MEUR Business case under development for Russia, with initial focus on St. Petersburg region

4 Presentation/Kirsi Kekomäki /3/2015 Puumerkki outlets FI NORTH Jyväskylä Kuopio Oulu EAST Joensuu Kotka Honkalahti Mikkeli WEST Kauhajoki Pori Tampere Turku SOUTH Kerava Lahti Honkalahti

5 Presentation/Kirsi Kekomäki Tallinn Näpi Imavere Viljandi Paikuse Riga Launkalne Alytus Vilnius PM terminal (WoodPax) Puumerkki Baltic Puumerkki AS Established 1997 Puumerkki SIA Established 1999 Puumerkki UAB Established 2005 = Location of Stora Enso Timber sawmill = Puumerkki outlet = Puumerkki terminal

6 Presentation/Kirsi Kekomäki Puumerkki values Customer focus We are customer’s first choice Performance We deliver results Emphasis on people Motivated people create success Focus on the future We take the first step

7 Presentation/Kirsi Kekomäki Puumerkki- master’s mark Vision The best wholesale distributor of wood products Mission Flexible and profitable distribution of Stora Enso Timber’s products. Strategic goals Additional value for customers and suppliers Operational excellence Profitable growth

8 Presentation/Kirsi Kekomäki Puumerkki group: Mangement base  SBA Puumerkki’s mangement is based on three diffrent SBA (Strategic Business Area) Management via SBA’s in Puumerkki Oy (=FI) has proven it’s efficiency over the years. Proof of concept from operations in Finland  Taken in use in each Baltic country from ’day 1’. Each SBA has: »Own budget »Own short (1-3 years) and longterm (4-10) strategic planning. »Each SBA Director is member of MGMT

9 Presentation/Kirsi Kekomäki Why SBA based management? 1/2 Follows StoraEnso’s strategy: Cutomer’s fist choice. We focus on customer: –Our product’s are fairly simple  One can learn what is needed of 2x4 boards! –In our strategy we have focus to customer: One knows what is needed of 2x4’s, now only thing that is needed is ’What cutomer needs?’...In other words our mangement is based on customer segments.

10 Presentation/Kirsi Kekomäki Why SBA based management? 2/2 Customer base multifaced  construction companies requires diffrent kind of professional skill than retail and industrial customers, even if products as such are same. Regional diffrences in constructions. (for example. Infra detached houses). Because construction industry as such is sensitive to economic fluctuations, SBA – based mangement gives possibility to analyse business in detailed segments –For. example; new houseing starts might go down, but overall demand stable due to increased renovations and interior furnishing. Knowledge-base required to handle all SBA has to be devided among several employees to minimize company’s risks.

11 Presentation/Kirsi Kekomäki Puumerkki customer base SBA1 Construction Merchants Industry SBA2 SBA3 National construction companies, local construction companies, public constructors National merchants chains, independent merchants House manufacturers, joinery, packaging industry, roof truss manufacturers

12 Presentation/Kirsi Kekomäki Sales to SBA’s 2006 Industry (Sba 3) 58% Construction (Sba 1) 17% Merchants (Sba 2) 25%

13 Presentation/Kirsi Kekomäki Products Timber Sawn Mouldings Impregnated Thermowood Kerto Wood Platform Laminated logs Sheets Plywood Chipboard Fiberboard Gypsum MDF Laminates Doors and windows Flooring Parquets Doors Windows Insulation Insulation wool

14 Presentation/Kirsi Kekomäki Why we entered Baltic market? StoraEnso Timber’s sawmills and further processed facilities in all baltic countries are our back-bone. Align with our and group strategy: –Think global act local. Our Finnish customer and suppliers have established their business in Baltic. Market outlook; both short and long term Import/ export market

15 Presentation/Kirsi Kekomäki Starting point in Baltic? All Baltic companies were green-field operations: –No ’good old’ business habits –No change resistance Challenges: –Legistlation; Finland’s stable market habits gave us too comfortable feeling. –Credit management/ claims; – Payment term policy –Claim handling –Recruitment –Right people hard to find and even harder to keep –Costs: –Fixed cost increase rate –Currency risks –Long term plans: –What to expect? There has not been stable market situation in past decade, only potentional

16 Presentation/Kirsi Kekomäki What we measure (KPI)? Figures: –Material index = (stockturn x profit margin%) –Fixed cost per person / turnover –Servicelevel (%) –StockTurn –EBIT(DA), ROCE, CASHFLOW, PROFIT –Turnover, profit margin....Above figures or cominations of figures are base on our personell reward system in Baltic Immaterial: –Customer ABC –analysis (profitability) –Number of customers –Tunrover of workers

17 Presentation/Kirsi Kekomäki What we have learned in Baltic... Important to find a good mix of new-local and own resources at start-up. Utilize full purchase power of whole group. Company image can variate a lot between dirrenct countries Importing good to our corner-stone market (FI) is also benefit. Set realistic goals, not only based on market potentional When a lot of new people are joining company  Make sure that people know company strategy. In growing market: Focus on bonus and rewarding of people in order to keep your company attractive and effective. Implementing ’global’ ERP was full of challenges.

18 Presentation/Kirsi Kekomäki Russia in our focus Business plan under development SET has two sawmills supplying sawn-wood (KD) to both domestic and export markets Own persons working at Russia to build and verify our business concept. Customs fees for log export from Russia In breif we fell at the moment that... Russian customers start to realize changed market conditions Domestic supply growing since export volumes go down Difficult log supply situation helps to keep the balance Foreign and export oriented mills showing interest to Russian market Demand: growth trend, but no statistics available Way to enter market, is via our existing international customers?

19 Q/A Thank you!


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