c/o Teollisen yhteistyön rahasto Oy (FINNFUND)
P.O. Box 147
00181 Helsinki - FINLAND
tel: +358 9 348 434 (please ask for Finnpartnership)
A few years ago, Betonimestarit Oy went to India to identify opportunities for producing concrete frames and elements. The company received support from Finnpartnership to map the requirements for establishing a joint venture.
In India, Betonimestarit engaged in a joint venture that produces concrete elements that have promising prospects in the country’s growing construction market.
The company is headquartered in Iisalmi and it has production at various locations across Finland. It had previous experience of international markets from Sweden. According to Sirkku Saarelainen, Director of Administration at Betonimestarit, going to India was a big leap for the company. Everything started with the needs of Indians. ‘The Indian government is supporting a residential housing programme, which requires Indian construction companies and real estate investors to adopt new technologies and an international partner’, Saarelainen says. Betonimestarit had received several contact requests asking if the Finnish company would be interested in expanding to India. ‘On a few occasions, we went to India to learn more about potential partners. We ultimately selected an Indian steel industry manufacturer to establish a joint venture with.’ The shareholders of the joint venture are the Indian Simplex Group and Sarga Energy and the main owner of the Betonimestarit Group, Invest Saarelainen Oy.
The joint venture’s concrete element factory has begun operations in Khopol, near Mumbai.
‘The first production hall is complete and the production of wall elements has been started. A production line for hollow-core slabs is under construction.’ Some of the equipment for the production facility has been supplied by Elematic, a Finnish concrete element manufacturer. The total value of the project exceeds EUR 10 million. The source of the funding is from Indian business partners. ‘Our role is to supply the necessary know-how for the project.’
Betonimestarit received business partnership support from Finnpartnership for preparing its business plan and seeking partners in India. ‘We achieved our goals. Identifying Indian business partners was successful, a joint organisation was established and production has been started. The form of funding provided by Finnpartnership has been good and functional.’
Finnpartnership also granted support for training the personnel the joint venture, but this support was not used by Betonimestarit. According to Saarelainen, starting the training has been the greatest challenge of the project. ‘We have negotiated with several vocational institutes and polytechnics and requested quotes from them for training either in Finland or on-site in India. We have not received any quotations.’
Saarelainen believes that there are excellent opportunities for exporting Finnish construction expertise to growth markets such as India. ‘There is a lot of talk of exporting Finnish expertise abroad, but it seems to be difficult in a traditional industry such as this. Our company’s own resources are not sufficient. We would gladly welcome partners in exporting Finnish construction expertise abroad.’
Element construction is still an unfamiliar construction method in India. Houses are usually built entirely on-site. Constructing an apartment building takes typically 2-4 years, while the same project in Finland usually takes a year. ‘The Government is seeking new technology, such as element construction, in order to expedite construction. Otherwise, apartment construction cannot keep up with population growth.’
According to Saarelainen, an entrepreneur needs honesty, openness, hard work and above all patience. ‘We had some problems in the beginning, but now we believe we understand the local business culture. We have also learned the local concept of time and have learned to add at least six months to all schedules.’ Betonimestarit has also learned that the huge country also has all kinds of entrepreneurs. Selecting the right partner is crucial. ‘It is worth investing in identifying the right partner.’
Last autumn, Saarelainen participated in a TEHO course, which teaches procedures for businesses in challenging conditions. The course was organised by Crisis Management Centre Finland. The practical TEHO training teaches how to prevent risk factors and to operate in unexpected situations. Through simulated scenarios, the training applies subjects learned both in theory and skills training.
‘When compared to Finnish conditions, one may encounter unexpected situations in a different work environment. It is a good idea to prepare for different types of risks in advance. The course was illustrative, as different challenging situations ranging from bomb threats to kidnappings were addressed through roleplaying, for example’, Saarelainen says.
TEHO training is intended for people who work especially in developing markets or are planning on going there. The courses are suitable for individuals who are responsible for international affairs, such as managing directors, export personnel and specialists who need to assess new markets and work in them.