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Peikko Group Global (English)

Russia – to invest or not to invest?

March, 29, 2017

I spent a weekend with my wife in St.Petersburg, Russia. On Saturday evening we went to the ballet in the famous Mariinsky Theatre. And as many of you know, the Russian ballet is said to be the best ballet in the world.

Next to us sat a young Russian lady and we started to chat. She had never lived in Soviet Union (was born in 1992), was educated by an university in Finland, and had a Catalonian boyfriend living still in Barcelona. And this boyfriend she had naturally got to know through the internet. I think this lady with Armenian roots is a good example of Russia today -> there is no “average Russian” and the reality does not necessarily correspond with the Western perceptions of Russia.

When doing business the key is to have realism and opportunism in good balance, and also see the patterns for the future. And to define the patterns for the future is especially difficult in Russia.

We at Peikko, have had a successful but small 20-person team in Russia already for quite some time. However, this team has been lacking a proper manufacturing premises. For this reason Peikko just bought an industrial property of 25,000 m2 together with another Finnish company, and will have more than 7,000 m2 of modern space for our operations during summer. From the facilities point of view we are able to increase our operations now by 5-fold and to manufacture all key products for the Russian market in Russia; a requirement to do any viable business in our market segment of construction materials.  

In Peikko’s view, now was the right time to invest and serve our clients even better. Only future will show whether we were right or wrong. 

Topi Paananen

M.Sc. (Econ) has been Peikko Group's CEO since 2010. He has worked at Peikko since 2005 and has previously held the positions of Chairman of the Board of Directors and Director, International Operations. Before joining Peikko, Topi worked in the mobile phone component business (Eimo/Foxconn) and decorative coatings business (Akzo Nobel).

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