Estonian Metal and Machine Industry

Estonian Metal & Machine Industry

Estonian Investment Agency

December 2011

Introduction of the Mechanical Engineering sector

Sales:1.05 billion EUR in 2009

Exports:670 million EUR in 2009(64% of revenue)

Sales EUR 1.05 billion in 2009

Main Branches of the Sector

67% Metals and Metal Products

18% Machinery, Tools & Equipment

15% Transport Equipment

19,400 directly employed

1,200 companies

R&D investment increased nearly 800% over five years period, reaching 2.7 million EUR in 2007

Sector id divided to 3 main branches: metals &metal products; machinery & equipment; transport equipment

Metal & metal products is the largest segment by number of enterprises, headcount, revenues & profits

Transport equipment sub-sector has the highest export orientation

Transport equipment sub-sector is the most profitable overall & per capita

Key Facts:

Metals & Metal Products

Sales: 695 million EUR in 2009

Exports:400 million EUR in 2009(58% of sales)

Headcount: 12,000 in 2009

Key Facts:


structural metal products

treatment and coating of metals; machining

other fabricated metal products

basic precious and other non ferrous metals

tanks, reservoirs and containers of metal

cutlery, tools and general hardware

forging, pressing, stamping and roll forming of metal; powder metallurgy

casting of metals

tubes, pipes, hollow profiles and related fittings, of steel etc...

0% 12% 24% 36% 48% 60%

0%

1%

1%

1%

2%

4%

12%

25%

54%

951 core manufacturers of metals & metal products

Net Sales by Segment 2008

BLRT Marketex OÜ Industrial company engaged in the execution of metal construction projects and realisation of turnkey projects principally in Estonia. Annual revenues Euros 64 million, 475 employees.

AS Viljandi Metall metal constructions

Hanza Tarkon Hanza Tarkon’s work ranges from cold stamping, milling, turning, plating etc to assembly of mechanical and electromechanical electronic units. The company was first established in 1907 and privatized in 1996. In 2006 Hanza Tarkon also set up a factory in China. Annual revenues Euros 32 million, 402 employees.

Metalliset

Metalliset is a Finnish Group that focuses on comprehensive contract services for industrial companies. In Estonia they have two production plants (Narva and Tallinn) and focus on production (sheet, machining, plastics and melds) and surface treatment services. In addition, they offer product development and design. The group has subsidiaries in Estonia, Finland and the Czech Republic. Annual revenues Euros 10.6 million, 167 employees.

Ruukki Products AS

Ruukki started their core business in Estonia in 1992. Today they have two production plants in Pärnu. They focus mainly on construction and metal products. The construction unit produces metal-based construction solutions for retail, industrial and logistics buildings. The metal unit produces aluminium and steel-based standardized, as well as special, products. Ruukki employs approximately 250 people in Estonia.

AS Saku Metall metal constructions

Favor AS 167 employees. Provision of metalworking services; metalwork subcontracting.


Key Facts:

Machinery &Equipment


Exports:122 million EUR in 2009(68% of sales)


Key Facts:

Machinery & Equipment

143 core manufacturers of machinery and equipment

Other general purpose machinery

Other special purpose machinery

Agricultural and forestry machinery

Metal forming machinery and machine tools

General purpose machinery

0% 12.5% 25.0% 37.5% 50.0%

5%

9%

18%

23%

45%


Machinery & Equipment

ABB AS (SE) (862)ABB manufactures power products, power systems, automation products, process automation, and robotics. ABB has implemented ISO 9001 and ISO 14001 certificates. In addition to the main office in Tallinn, there are plants in Keila, Jüri and Maardu. Active in Estonia since 1992, 1862 employees at the end of 2009, annual revenues Euros 123 million.

AS Hekotek AS Hekotek is a mechanical engineering company founded in 1992 by Finnish specialists; its main operations include designing and producing woodworking technology installations. In 2007, Hekotek's ownership changed and it now belongs to Sorb Wood, which belongs to the Carl Bennet AB concern in Sweden. Hekotek Estonia employs approximately 100 people, annual revenues Euros 6.5 million.

AS Fors Manufacturing of hook lift systems, lumber trailers, tractor processors. Fors MW is the oldest Swedish company in Estonia and was founded in 1992. The headquarters is situated in Saue, Estonia. There are two subsidiaries, one in Norrköping, Sweden and one in Shanghai, China. Annual revenues Euros 10.3 million.

Cargotec Estonia AS

Manufacturing of steel structure and components, and cargo handling solution components. Subsidiary of Cargotec Group. The company was previously owned by A.P. Moller–Mærsk Group. Cargotec acquired the company as they perceived it to be the best alternative when developing competitive component sourcing. Important roles are played by the close proximity to other EU countries and low-cost manufacturing. Annual revenues Euros 14.5 million, 281 employees.

AS Finmec Heavy duty welding and machining of steel structures. Finmec AS was founded in 1994 and is a subsidiary of a Swedish company whose production facilities are located in Estonia, including modern CNC controlled cutting. Annual revenues 4.8 million, 99 employees.

Zircon Technologies AS (UK)

Manufacturing of injection melds and high precision tungsten carbide dies. Zircon has produced dies for such brands as AEG, AMI Doduco, Brandauer, Ekranas, Electrolux, Osram and Tyco Electronics.

Key Facts:

TransportEquipment


Exports:147,4 million EUR in 2009(84% of sales)


Key Facts:

Transport Equipment

120 core manufacturers of transportequipment

Automotive parts & accessories

Motor vehicles, trailers & bodies

Ships, boats & other transport equipment

0% 15% 30% 45% 60%

21%

23%

56%


Transport Equipment

AS Bestnet Trailers. Annual revenues Euros 6.8 million, 121 employees.

AS BLRT Holding firm for a group engaged in building and repairing of ships in Estonia and abroad. Annual revenues Euros 35.1 million, 118 employees.

Loksa Laevatehase AS

Shipbuilding components. Manufacturing of hatch covers and non-curved steel blocks. If required, Loksa Shipyard delivers products fully painted and outfitted. The company is more than 100 years old. In 1994 the company became part of the A.P. Moller-Maersk Group, after which comprehensive renovation and advanced production installment took place. Annual revenues Euros 24.2 million, 588 employees.

AS Norma

Norma is mostly focused on the automotive industry. Connections with the international automotive industry were established in 1973, the year in which Norma started producing safety belts for cars. In addition to manufacturing and distributing safety systems for cars, today Norma is gradually becoming a major manufacturer of safety equipment components for the international automotive industry. Manufacturing of seatbelts and assemblies, progressive stamping, fine blanking, injection moulding, etc. Today Norma is part of the Autoliv Group and employs nearly a thousand people. Revenues 51.4 million, 616 employees.

Norcar BSB Eesti AS (FI)

Norcar BSB was established in 1979 in Sweden. In 1994 a subsidiary in Estonia was established. Today they have opened new production facilities with automated welding and employ a total of 54 people. Norcar BSB is focused on the manufacturing of miniloaders, farming products, and industry automation.

AS Respo Haagised Trailers, Annual revenues 6.4 millions, 53 employees.

Stoneridge(USA)

Automotive electronics production and development unit of global auto-electronics group. Established in Estonia since 1998. Eleven years later, Stoneridge’s Estonia facility employs 170 people, including 11 design and development engineers dedicated to the part of Stoneridge Estonia which has received the most attention locally: product research and development. Annual revenues Euros 20.6 million.

Previously worked in an engineering role

46,700

Engineering Workforce

TOTAL 98,300

Currently work in engineering role

51,600

Engineering Workforce

Private sector small company

Private sector medium company

Private sector big company

Government/Public sector

Self employed

Education further/Adult education

Education school0% 8% 15% 23% 30%

1%

1%

8%

10%

24%

26%

30%

Quality Talent Pool

45,700 Specialised Secondary

19,100 Master’s Degree

900 Doctorate / PhD Degree

8,700 Bachelor’s Degree

Engineers: Key Specialisms

10 years or more

5-10 years

2-5 years

less than 2 years

0% 13% 25% 38% 50%

Experience working in a Technical Engineering Role

Engineers: Key Specialisms

Electrical and Electronics

26,700

Mechanical 22,200

Industrial and Manufacturing

22,000

Automotive 14,300

Higher Education

9 universities (6 public, 3 private) ca 52 000 student

Related to the industry universities:

Vocational Education

51 vocational schools ca 28 500 studentsexact

R&DCompetence Centre Competence / Activity Website

Competence Centre in Electronics-, Info- and Communication Technologies -

ELIKO

To improve competitiveness of Estonian and European ICT industry through the deep integration of research and production institutions

www.eliko.ee

Innovative Manufacturing Engineering Systems

Competence Centre -IMECC

To improve the competitiveness of Estonian engineering industry and to develop cultural, ethical, and social values based on increasing integrated industrial use of new technologies

www.imecc.ee

Software Technology and Applications Competence

Centre - STACC

To conduct industry-focused research with the aim to develop leading-edge solutions in the fields of data mining and software technology

www.stacc.ee

Tehnopol — a science and business environment

Tehnopol is a science and business environment for knowledge based companies. Today there are 150 companies, Tallinn University of Technology and IT College in Tehnopol.

www.tehnopol.ee

Labour Costs

0

1,250,000

2,500,000

3,750,000

5,000,000

Czech RepublicEstonia

Finland

GermanyHungary

Latvia

LithuaniaPoland

Sweden

4,328,684

934,646993,961961,9251,099,787

4,662,734

3,642,474

1,195,1221,406,826

Total labour costs EUR/year Machine tools & equipment110 persons

Low labour costs, with a Scandinavian-like culture

I

Type of space Tallinn Tartu (South)

Pärnu (South West)

Narva (North East)

Industrial lease 2.8 - 5.0 2.0 - 4.0 1.6 - 4.4 3.2 - 8.0

Industrial land purchase price

18 - 20 11 - 18 6 - 15 5 - 15

Office 6.5 – 14.1 6.0 – 12.8 6.0 – 9.2 4.5 – 8.3

Industrial Property Market

Indicative range for rents (excluding VAT and operating expenses) and industrial land price in major towns of Estonia for industrial and office premises (EUR/m2 per month).

Industrial &

Science Parks

SILPORT hinterland territory of 600 has Free Zone status and is available for developing different terminals, distribution and manufacturing facilities.

SAIVTA is developing 6 industrial parks in Ida-Viru County in Eastern Estonia, a key development area.

Paldiski South Harbour Industrial Park - located 50 km west of Tallinn and it is the third largest harbour of the five harbours belonging to Port of Tallinn. A 21 ha industrial park area bordering on the harbour is developed.

Muuga Industrial Park is located in Muuga Harbour, the largest and deepest cargo port in Estonia. The total area of the industrial park is 75 ha.

Electronics and optics sub-sector77% of workforce of the sector works for foreign company

Transport equipment sub-sector61,4% workforce of the sector works for foreign company

Foreign Investments

More successful then national companies

More export oriented (95,8% of revenue from export)

Base metals:

Finland (19%)Turkey (13%)Sweden (9%)Latvia (8%)Poland (6%)the Russian Federation (6%)Germany (5%)Norway (5%).

Main Trade Partners export destinations

Machines & Equipment:

Sweden(28%) Finland (25%) Russia (9%) Latvia (6%) Germany (5%)Denmark(4%)

Transport Equipment:

Russia (23%)Latvia (21%)Lithuania (16%)Sweden (11%)Finland (7%) Germany (3%).

Opportunities Foreign Investments

Nordic and Baltic production and distribution hub

Contract manufacturing and engineering services Design and R&D services

Product development, piloting and testing

Ideal „small country” test market

Scalable development sites around major sea and land hubs

Investment Support EAS

KredExRegionalmore?

Thank You! :)

Oksana NovozilovaFDI Project [email protected]

Estonian Metal and Machine Industry

Business

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