Manufacturing firewood processors is one of Terra Patris Group’s four foundations. The sector’s growth prospects are promising.
Hakki Pilke is one of the well-known, if not the best-know, brands from Haapajärvi. It also has old traditions, since the manufacturing of firewood processors began in the area as early as in the late 1970s. They became a part of Maaselän Kone Oy’s product selection in 1993, due to a company acquisition.
Since 2000, Maaselän Kone has been a part of the Tampere-based Terra Patris. Terra Patris is a congolomerate that operates in firewood processor, earth-moving machinery and contract manufacturing industries and boat manufacturing. The building of the group actually began with the acquisition of Maaselän Kone.
– The company was selected, because it has understandable products and it was on the first step of the growth path, explains Jari Löfroos, the group’s founder and CEO.
Before founding Terra Patris, Löfroos had a twenty-year-long career in industry. However, being an entrepreneur had come to him as a family legacy. Through the family business, Löfroos decided to find training and experience from elsewhere until it was time to found his own company.
“I felt that the trajectory of paid employment was nearing its end. I also thought that since I know how to make things for others, why couldn’t I also make them for my own benefit”, Löfroos says.
In addition to Maaselän Kone, two other Finnish firewood processor manufacturers, Palax and Japa, have been acquired into the group. According to Löfroos, this was done to gain the critical mass and credibility.
– All three compete among each other in the market like normal, but we have scale advantage in product development, purchases and production. When the technology becomes more complicated and digitisation advances, individual companies are too small to fill the boots the progress requires.
All this time, Hakki Pilke’s production has remained in Haapajärvi, where the company nowadays employs 70 people, with the revenue being about EUR 12 million. Over 80 per cent comes from exports. Hakki Pilke is sold in 35 countries, including New Zeeland, Japan and South America.
Currently, the firewood processor manufacturers are doing well, since their revenue grew within the whole group by almost 20 per cent in the latest financial period. The increase in demand relates especially to the more hefty machines, due to the firewood business becoming more professional. According to Löfroos, the same is true for the whole agriculture and forestry industry: progress marches towards even bigger units and machines.
“Our most important customer group is farmers, for whom firewood is often a subsidiary trade. However, at the same time the amount of full-time firewood producers is growing”, Löfroos states.
In the market the firewood processors do still have a lot of growth potential, which is based on the society developing and becoming more technical. There is always a need for firewood and the role of renewable bioenergy is growing. Despite that, even in Finland, the model country of technology, a large share of firewood is still made with an axe and saw.
– At the same time, the new generation does not know how to and does not want to use their time on chopping wood. They prefer using ready services. Globally, this is also connected to the general raise in living standards. In turn it increases the demand for machines and services, says Löfroos.
Löfroos’ own job description is heavily related to predicting the future. He states that he spends a lot of time following different trends concerning design, technology and digitisation, for example.
– But I’m also one hundred per cent involved in the companies’ every-day life. My office is located in a car and I strive to visit Haapajärvi in person as often as possible. Nothing beats a personal meeting, but a lot of practicalities are now handled through telephone and conference technology.
Terra Patris’ annual revenue is about a hundred million euros. Its subsidiaries employ a total of almost 650 people around Finland.
They each focus on the core of their own business while the group remains in the background. The common services, such as financial administration and IT functions are handled manually from the Tampere office.
According to Löfroos, the four current main branches are the ones the group will use to gain growth in the future. In company acquisitions, one of the most important criteria has been that the company has export activity, its own products, significant growth possibilities and profitable business. All seven current subsidiaries operate in Finland.
– We’ll stay in Finland for as long as it is possible. Hopefully, the political decisions will support this. We export to a total of 70 – 80 countries. The competition is tough when we are in line with many countries with lower productions costs.
More about Maaselän Kone: Hakki Pilke
Text and pictures: Hanna Perkkiö