Finnish construction export changes its form

Kimmo Lundén
Business Reporter, M.Sc. (Economics)
Newspaper Maaseudun Tulevaisuus
Finland

The author is a member of the jury of the yearly construction engineering reward given by Finnish Association of Civil Engineers, RIL ry.

Last fall, I sat for the second time on the jury, which selects a construction project completed or to be completed during the current year as the building project of the year. Finnish Association of Civil Engineers, RIL ry. awards the annual RIL award to the construction work, site or concept that best represents high-class, high-quality and innovative Finnish civil engineering skills. The award was solemnly handed out at Helsinki’s Säätytalo on November 24, and MP Elina Valtonen, who acted as the chief judge, announced Espoo’s Blominmäki wastewater treatment plant as the winner of the RIL award. Overall, it is rightly said to be the most significant public sector investment for decades to protect Baltic Sea’s environment. It was noteworthy in the distribution of the awards that an honorable mention was given to the spectacular bridge with its arched pylons over the Saigon River built in Ho Chi Minh City in Vietnam and designed in Finland. The award was a recognition of Finnish export of construction know-how and design in 2022.

RIL Ry (Finnish Association of Civil Engineers) has now awarded the recognition for the 50th time. For export projects in the construction industry, winners in previous years have been, for example, the conference palace built by the Finns in Baghdad, the capital of Iraq (1986) and the mining town built by the Soviet Union in Kostamus (1986).

Construction exports by Finnish companies have been relatively quiet since the end of the project export boom. In the 1960s and 1970s, construction was Finland’s most international industry. There were significant project exports to the former Soviet Union as well as to the Arab countries of the Middle East. Over the decades, Finnish builders have made huge profits and also deep financial losses in project exports to the world.

The collapse of the Soviet Union put an end to the barter trade, where the construction industry association, Finn-Stroi Oy, had implemented large construction projects in the 1970s and 1980s, such as the Kostamus project, the Svetogorsk paper mill, and the Viipuri pulp and paper mill. Eight major Finnish construction companies of the time were shareholders in Finn-Stroi. According to sources, the share of construction exports in the trade between Finland and the Soviet Union was at its highest around ten percent. In bilateral trade, it was also possible for work to be exported from a high-cost country, Finland, to a low-cost country like Soviet Union. The collapse of the Soviet Union in 1991 and the preceding end of bilateral trade collapsed the activities of Finnish builders in the eastern neighbor.

Russia kept the export builders busy since then. YIT, SRV, Lemminkäinen and small house builders like Finndomo and Honka continued their construction exports in the 2000s. Russia’s aggressions and attacks on Georgia and Ukraine and the sanctions, that followed, put an end to the construction activities of Finnish companies in Russia.

On April 28, 2022, the construction company SRV announced, that due to the war and the market situation caused by it, it had written down almost all of its holdings in Russia from its balance sheet. SRV had operated the shopping centers it had built in Russia. Write-downs totaled EUR 141.2 million.

Morality, ethics and environmental sustainability are emerging trends in construction. An arms factory built for Libyan dictator-colonel Muammar Gaddafi, apartments built for the Nigerian military junta, or the construction of a military village for the Russian army near the Finnish border in Alakurtti would no longer be business-as-usual for Finland’s construction industry or export policy.

Pace building, alliance know-how, utilization of algorithms and data models shorten construction time, improve productivity on construction sites and help to stay within set schedules and budgets. Increasing productivity has been a challenge in construction for decades. There are always changes at the construction site. The site runs on partnerships and networks. The old goal of making it ready at once, has not been an easy goal to achieve – even now.

The Thu Thien 2 -bridge over the Saigon River, based on Finnish bridge design and awarded with RIL’s honorable mention, is an example of Finnish bridge know-how and advanced technology. The main designer of the bridge is engineering consulting firm WSP Finland Oy, which has also been responsible for the bridge’s architectural and structural design. Bridge export is the export of high-tech design and service rather than the construction itself. In the bridge built in Vietnam, the same data model concept and instructions have been used as in the bridges built in Finland. The bridge over the Saigon River is impressive with its 110 meter high arched pylons. Its shape is peculiar, but its solution is optimal. When the climate changes to strong wind conditions, rising water levels and erosion, you have to be prepared.

Planning and the utilization of data models are the export of Finnish construction know-how today.

Expert article 3327

>Back to Baltic Rim Economies 5/2022

To receive the Baltic Rim Economies review free of charge, you may register to the mailing list.
The review is published 4-6 times a year.