December 28, 2011

Combination of wood & steel: ecological?

There is a growing talk about ecological living in our western societies. I recently had a discusssion with a person who is considering to start architectual company focused on eco-buildings, mainly focusing on developing countries. So the message of "sustainable buildings" is spreading also to outside tradional eco-countries, countries that can afford to talk about these values.

For me these ecological values are always a dilemma, because they many times forget about the end-users, the customers. It is nice to think in ecological way, however, would you live in a mud-house yourself with your children? Also, the dilemma for me are the profets that are preaching their gospel black-n-white. Sometimes only wood is great, sometimes only steel and sometimes only concrete. Or sometimes only stray and mud.

We at Peikko rather be neutral to about this - we only focus on creating value with our existing and future products on this level as well. And we believe in combination of materials.

Recent case on this can be seen above. A project in Liechtenstein (read the whole article in our customer magazine Concrete Connections ( combines our Deltabeams and wooden slabs and walls. What are you thinking after reading this? For me it looks like at least better than buildings made out of mud :-)

December 16, 2011

Optimism creates development and dynamism – Happy new years of 2013-2015 already !

Whenever I visit North America I am always amazed about the drive and optimism I see there. “Today it is going great, and tomorrow looks even better”, goes the frequent saying. Of course this mindset has seen some changes in the recent years, nevertheless, the attitude is still clearly there.
The optimism is also visible in above construction statistics. The US Construction market statistics 2007-2016 by one institute of McGraw Hill is showing 19% growth for 2013, 31% growth for 2014 and 20% growth for 2015 – interestingly and  maybe  due to “politically correctness” there is no growth projection for 2012. Why are they thinking that 2013-2015 are so great?

On the opposite, while Europe is suffering at least the same as North America, the statistics are much more downward.  The growth for 2012 is -0,3%, and the projection for 2013 (1,8%) and 2014 (2,0%) are pretty mild.
The interesting here is that why are the American estimates so much more optimistic for the future? Do the official estimates lead to companies to overinvest or do they lead to much-needed dynamism in the market place, whereas the companies in Europe are more or less halting all their development while reading the depressive (and more correct?) estimates?
I believe that optimism is always good - let´s forget the realism and look the world through the optimistic glasses. At least it is much more fun to imagine that markets will be much better in 2013, after the realistic no-growth of 2012.
I wish you happy, growing new years of 2013-2015 already !

November 30, 2011

Let´s hope it is windy, but not too windy

During the last days there have been big storms throughout Scandinavia: winds have been blowing and again there have been thousands of households without electricity. But because of wind there is also more and more electricity available, there are a growing number of wind turbines visible where ever one travels. 

I have had the privilege to visit a number of companies involved in constructing wind turbine towers and the general growth of the business is very visible. The new towers are become higher and higher, more than 150 meters high, and thus the usage of this form is energy is become more and more efficient. It is interesting to see how the development of technology is really making a difference – and has put the pay-back calculations of investors´ excel sheets to show plus instead of minus.

There are also nice new things I have learned – why for example fog is very bad for the business. It took me a while to understand this: in central Europe all special large transports on highways is banned if there is fog around and thus no installation of new towers is possible during foggy season. So if one wants to wish good for the companies in this business, it better be sunny or just rain – fog is not good.    
Peikko is also happy to be part of this business community, by being a supplier to many great companies already. Have a look e.g. our real time webcam on our Hamina site, where the company is responsible for the foundations for a small windpark.

Let´s wish that the winds give more energy than take from us !

November 8, 2011

Can business be done only in one country?

Some years ago I was contacted by an investment banker. His client wanted to buy one of Peikko´s unit in central Europe. This was not the first contact of its kind, and that is why took a deep breath, relaxed in my chair and had a laid-back conversation.
With a smile I patiently listened to the inquiry, and started to ask questions. Why would the potential buyer be interested in buying just one unit, one factory and sales team of Peikko? What financial and commercial sense would it make for them? How would they perceive customers to react if this is done? Is it really so that in the buyers´ company there is absolutely no interaction beyond the boundaries of this given country?
From what I gathered, the potential buyer company was only interested in buying out their competitor in its local market – and really honestly thought we would be willing to sell and continue with a “white spot” in Peikko´s service map. This deal would have been a great benefit for the customers J  
I have been preaching about the effects of internationalization for a long time, but am I doing that only because of some selfish reasons? Or is our construction market becoming really more international?
After seeing a team of 50 persons of Peikko last week in our annual meeting and hearing all kind of customer stories on projects with involvement on multinational companies, I became again convinced that construction industry is dynamic, and international. This is fact, not science fiction.
My conclusion - the investment banker that called me was fundamentally wrong. I am happy if his client is happy to keep their business in one given country, unfortunately our customers and Peikko have selected another approach.  Future will show which approach is better.

October 24, 2011

The impossibilities of EU construction regulation

What an exciting and forward-looking title I have in this blog? But unfortunately a lot is needed to be done until I am able to change my opinion.
On one hand, there is new EU regulation that defines the CE-marking to be in use in July 2013. All products need to follow harmonized standard, or if this is missing, then need to have ETA (European Technical Approval) in order to qualify for CE marking.
Nice try, but does not work in practice. E.g. Peikko´s Deltabeam does not belong fully to any harmonized standard, and the ETA process might take substantial amount of time, e.g. 5 years. This is not because of Peikko only, but also because of the inefficiencies on the system EU itself has defined. E.g. even one EU commission member himself cursed the ETA approval system to be slow and inflexible in his speech some weeks ago.
Now, if the requirement now is summer 2013, what on earth is happening at 2013 for Peikko and e.g. its Deltabeam product? Peikko will just stop producing and selling Deltabeams? EU to declare that although there are more than 6000 buildings with Deltabeam around Europe, although there are 200 direct jobs attached to this business, producing will be stopped by EU because the product does not meet some paperwork requirements?
Of course not, Peikko will still have local certifications in place just like today and we will keep on producing and selling this excellent product. This is merely another story where regulation does not meet reality – and when regulation and related processes with it are not realistic, only some are able to follow the regulation.
Long live the local, country-specific product approvals, the great cause of inefficient competition in Europe !  :-)

September 23, 2011

Rusty Dreams

To jog in the mornings has taught me a lot in life. Cities look much different during morning hours and you tend to pay attention to totally different thigns than during the day.

One morning this week I had incredible experience, while jogging at the Juhu beach in Mumbai, India. Here is what I saw: aristocratic ladies walking with their servant, Bollywood star practicing her some sort of fit-out videos with cameras, some kind of male dance group streching prior their term in front of cameras, wild dogs having their morning breakfast by eating trash, early morning cricket games on the beach, fat businessmen jogging slow with their personal traners. There were things I definitely do not see at home in Europe - during one run.

What paid to my attention was the ugly palace at the sea front. The building itself looked great, no problem from the shape of it. But oh my God, how ugly it had become because of rusty water flowing on the facades.

How much the builder saved by not using galvanized or stainless materials? Maybe a lot. But over time, dream had not become true, but rusty.

How much the North American and European building owners owe money to strict norms and tight building codes that enforsces the use of stainless stell and galvanized steel? This week I realized that we owe a lot.

September 13, 2011

Mountains can be difficult

I had the opportunity to spend some vacation days in Switzerland and again, learned a lot of things.

On the positive side, it was nice to see a lot of construction activity on-going, particularly around the tourist sites. I hope the currency fluctuation of Swiss Franc is not making all tourists to avoid the country - I paid almost 15 euros for my Bic Mac meal and it really made me cry....

But what made me to think were the mountains and how the building sites were organized. It was incredible to see all crane/lifting arrangements - it was interesting to see how the shape of the country affects the building habits.

Firstly, I can now understand why Switzerland is cast-in place or in-situ country. It is just impossible to transport any precast elements if roads are narrow and have 40 degree angle....It was pretty understandable that e.g. bricks were used so much at the building sites - it was easy to have also smaller trucks to carry some pallets of products up hill.

Secondly, it was pretty amazing to see small, permanent cranes over the small building projects. The chaleets were like small apartment buildings, and when you looked at the shape of a ground again - crane was very much needed. In most countries all lifting would have been done by portable cranes, however, when again looking at the ground - portable cranes would have been impossible to bring to the site.

Thirdly, it was amazing to see how clean the building sites were. After seeing many kind of sites in my life, the Swiss punctuality was also visible in the sites. It was good for also for tourists to have a look.

All in all, mountains effect the life of Swiss people, also the construction workers. And make the life of tourists also pleasant.

August 19, 2011

Competitive thoughts

Competition is good and is making us to run faster - regardless of the industry we operate in. But competition can also be hilarious -and a good laugh is many times needed. Here are some experiences:

INNOVATION AT WORK: a supplier of one European trader is taking contact to us, "Can you buy from us, the other company has not paid us in time and we have many products we could sell to you" Once we visit the supplier for the sake of curiosity we find a full set of Peikko technical manuals - our competitior had brouhgt them and told them to produce similar items.

TRAINING OF NEW EMPLOYEES: I interviewed a person who had left from one of our dear competitors. He explained how the new employees were trained in that company - by using Peikko´s technical manuals of course - why not to use the best source for training?

PRICE SETTING: I was participating one industry event and after the official meeting was over a director of a larger competitor comes to me to discuss with an attitude of a teacher that "we need to talk and agree about pricing, you should increase the prices of your engineering products, column shoes etc. particularly in Germany". The person is pretty disappointed, even frightened, when I replied that "Maybe you have a productivity problem yourself? And by the way, it is against the Euroepan competition law to discuss any pricing. Period".

Life is enjoyable - filled with interesting surprises - also in the construction sector :-)

August 6, 2011

Peikko China "rock-n-rolls"

I had the opportunity this week to be in the opening ceremonies of Peikko´s factory in Zhangjiagang, near Shanghai. I must say that each time I visit China I am some way surprised.

The 2,5-hour drive from Shanghai airport to Zhangjiagang is like constant drive in Manhattan - high-rise buildings almost all the way, and a lot of construction activity on-going. One can easily see why China is becoming the single biggest construction market of the world.

There are also some things that make me wonder. I saw e.g. a master plan where a new Danish-type of a town area which will be built in the next years. Why is the city center of Copenhagen copied to China - why can China cannot just be original? The copies to me symbols lack of innovation - and innovation is what China needs.

Also, I got a little worried about the fact that the real estate prices are something that will not go down in China - at least that is the belief. Laws of gravity (what goes up can go down) only exist in Europe and North America.

Another sad fact is that I was not able to visit this blog-site from China - the site was blocked such as many other sites. Freedom of speech is unfortunatley not a value emphasized in that country.

But all in all, opening ceremonies at Peikko Zhangjiagang went well, a lot of nice words were heard, a lot of excellent food was eaten and most importantly, activities at the factory were at full speed and thus Peikko China is more than ready to serve its internal and external customers.

July 13, 2011

A bigger lie than statistics? Forecast?

In our company we once in a while buy some forecasts. Obviously when working in the field of construction, we want to know what is actually happening in that sector. The most comprehensive package from our main market place, Western Europe, is so called Euroconstruct -statistics. It is a combination of work from multiple statistical bodies from Western European countries.

Now it is time for summer holidays and I even had some time to read the latest information from June this year. The book is not as thick as Bible and even had some nice (statistical) pictures in it = good summer reading.

What was the outcome of my reading? Here are some of my learnings:

1) Nobody wants to be optimistic about their market performance. All forecasters got multiple blacks eyes during the last two years, so nobody wants to be optimistic now.

2) Construction output is linked with GDP growth expectations, see e.g. graph above. What a big surpise !

3) Look at all graphs at least twice and check their scale - e.g. graph above, GDP growth rate 1% and construction growth 2% scale -the picture would be very different only when putting the scales to be same. Conclusion: the guy who made this graph was an pessimistic one....

Please do not take me wrong - there were also very valuable data from Euroconstruct figures. But of course I will not reveal this - also competitors of us might read this blog. But what is sure it certainly requires skills to get data from forecasts which really can be used for business.

Enjoy your summer and please select better books to read !

July 6, 2011

Insulation makes sense - in right quantaties

Back some time ago I was visiting one seminar in southern Europe and listened to a presenter who was exited about the fact that insulation can be used in a wall element - between the outer layer and inner layer. So insulation is also possible in precast! And this was in 2011. I was sitting next to a Swedish manager and we were laughing quite a bit - the presenter was only 50 years late with his "innovation". E.g. Peikko was started in 1965 for producing the diagonal ties to keep the outer layer and inner layer of the sandwich element together. And after 46 years we are still producing a similar product.

The use of insulation is still not respected or used in all countries, not only in southern Europe. Just recently we lost a job in Gulf area of our ties. The reason was that the investor did not consider insulation to be important - instead of sandwich wall elements he wanted to have cheaper elements, with full concrete only. I can only imagine what kind of energy bills those houses will have -> there are 50 degrees outside, A/C is going full speed all the time but the investor surely saved money. Sadly the investor is even government related organization -> goverments can do silly decisions as well.

On the other hand, insulation norms can be also so rigid that they are next to insane. It looks like in some Nordic countries the planned requirements for insulation are so high that houses will be soon bunkers, nothing less. There is already apartment buildings build without balconies in order to make them into "passive houses". I am just looking forward when they create an energy saving building without windows...maybe one comes soon without doors as well :-)

The use of proper insulation is important but life is never black and white - it has to be economical and not in the extreme. We at Peikko are happy to develop new products, thicker ties to tie thicker insulation layers into element parts, better systems to cope with hard insulations materials etc. I just wish that governments will keep some sanity, both ways, not to be too lose and not be too rigid.

June 17, 2011

Life is so concrete

Peikko had a small stand in the event of "Life is so Concrete" in France this week. The event, organized by international precast concrete association, was filled with people, mainly CEO´s with precast element factory backgrounds and companies supplying products for this industry.

There were several discussions on-going that I will remember well.

Firstly, I met many people that had just started to work in the industry. There had been many changes in the organizations of companies many had recruited persons without industry experience - in my mind this is great and I hope these people will change this business and not just do as all people before them.

Secondly, for many the fashionable surroudings of Cannes and Carlton Intercontinental Hotel just did not match the reality of their home - some where even mentioning that they are reducing their organizations and the fact that a manager is spending time in such a beautiful location - not good if somebody would take a picture and send to the staff... Life is still tough for most of us in construction industry - volumes are still very fragile in Europe.

Thirdly, there was a real belief that CONCRETE as construction material is modern, active, architectual, sustainable etc. And the way people talked about was very business like - not awefully "religious" like I have seen in some events. The conference was about professional people talking about concrete as construction material in business-like manner. Very good.

Peikko was the only company in its special field of connections to have a stand in the exhibition room and enjoy the attention of many participants. Nice discussions with many smart people.

June 6, 2011

The dilemma of big countries

I recently had a nice chat with a person who had worked for a company in the field of construction. He was a national of a medium-sized European country, quite close to Germany. The main issue in his former company was that the German headquarters did not understand the customer behavior in his country. The headquarters wanted to do the business the "German way" and at the end of the day, the person got so frustrated that he decided even to leave the company.

And this is not to blame the Germans; I believe this happens to any single country & company where the home market is big enough. And once the home market is significant, we focus on it, we believe it is the most important and we try to copy-paste the way to do business to other countries. This is such an easy way to do a mistake. And funnily enough, the person I met was talking about the "German way" - it was not the "Company X way". In simple discussions nationalistic terminogy is popping up so easily - American way, French way, Japanese way, British way - all can be see also negative. Why is it so easy for us to act this way?

I believe that we at Peikko are pretty lucky to be headquarted in the microscopic country of Finland. Nobody expects in our organization that Peikko should act in other countries similar to how we do business in Finland. On the other hand, we need to understand that concrete and steel is the same in other countries and key methods and knowledge has to be transferred to other countries. How to be determined but not arrogant, goal-oriented but listening? Difficult tasks - but the right combination of global and local are the key for success.

May 17, 2011

Bravo Catalan

I was priviliged to make a brief visit to Barcelona, Spain and was positively impressed about many things. Life is not always how it is described in newspapers. Here are some findings: 1) Shopping malls did not have empty spaces - occupacy-rate was close to 100% in all main shopping malls, 2) It was difficult to book hotel room - occupacy-rate of hotels was very high, 3) I did not see many construction sites, however, the ones I saw, were working, and 4) Building specialists that I talked with were optimistic - companies were mentally well adjusted to low volumes, low prices and higher requirements - and were surviving. Development was on-going again.

I am also proud to announce that Peikko´s Deltabeam product won another construction award, this time at Construmat exhibition in Barcelona last week, via Peikko´s partner in Spain, Hormipresa. See more at - the site works both Spanish and Catalian so it will be easy for most of you....

Because of this great award my favorite for the soccer Champions League finals 28.5. at Wembley stadium is clear. I confess, because of this award I am bribed to be the fan of FC Barcelona - deep apologies for all Manchester United fans already :-)

May 12, 2011

Design for cost - but with what?

The old saying goes something like "90% of the costs are caused by design, only the last 10% can be effected during production." This is, unfortunately, true also in construction.

There are many sort of ways to design a building but the most advanced ways are 3D-modelling. Wysiwyg - what you see is what you get - works also in building models. And people not only talk about 3D, they talk now about 4D, 5D, 6D and I guess not after long about many other information is put into the models.

But in essence, 3D is at least better than 2D. There are not too many good players in the market in this area, biggest players are maybe Autodesk Revit, Nemetscheck Allplan and Tekla. Peikko is in one form or another co-operating with all of these players. And the latest news from this Monday is....Tekla is about to be bought by another company.

World needs competition and I am very happy that the purchase offer of the shares have not, at least not yet, been made by Autodesk. We need in this field more companies, not less. After visiting Trimble´s stand back some year ago in one American exhibition and seeing how Tekla´s 3D model could work hand-in-hand with Trimble could really prove that the building was made according to the 3D model. I got convinced that these guys might create interesting things together. At that time it was merely co-operation, now Tekla´s team might be part of this innovative company.

I hope Trimble´s offer goes through, and if so, I wish all the best for Tekla´s team. I am looking forward on new solutions that this aquisition might bring!

May 2, 2011

Baghdad Street - attitude counts

During Easter time I had the opportunity to visit Istanbul, Turkey. There is some magic in the city, the east and the west are so present there. What I find the most interesting is actually the places where hardly any other Western tourists exist, the Asian side of the city.

The main shopping boulevard, the centre for commercial activity there in the Asian side is called "Baghdad Street". I was told that originally the name was given because that is where the traders left to Baghdad, Iraq, from Istanbul.

What I have learned in Turkey, this simple name shows the international attitude of Turkey. The people are all the time on their way to visit neigbors, understanding that their sole existince is based on interaction and trade between others.

How many big cities have named their main streets according to the capital of the neighboring country? How big is the "London Street" in Paris? Or "Berlin Street" in Amsterdam? Or "Washington Street" in Moscow? Street names may tell a lot how the outside world is viewed in the given country.

The Turkish attitude towards international trade starts with attitude. It is no wonder that Peikko has delivered goods to e.g. Afganistan and Turkmenistan via Turkish companies. No wonder that Turkish construction companies are doing work in Middle East, North Africa and Russia. In the international contractors list, Turkey had the world's #2 position right after China; there were 33 Turkish companies in the top 225 international contractors' list in 2010.

It is the "Baghdad Street" -attitude that counts.

April 21, 2011

Nationalism is bad for business

In my home country Finland there was just last weekend parliamentary elections where a small, populist party took all of a sudden 39 seats out of 200. Anti-immigration, anti-EU & anti-everything party with a funny name of "True-Finns" is now going to be in the parliament, maybe even taking part of the coalition government. Oh no !

My learnings in the world of construction has been that nationalism never boosts development. The most self-sufficient and nationalistic market areas have many time the most backward technologies in use. The adaptability for change and new things makes the difference between the good and bad - nationalism does not help in this.

I remember so well one discussion at teh World of Concrete exhibitions in USA some years ago where a visitor asked what kind of references we have in the state of Kentucky - I told that unfortunately none so far, only references in 30+ countries and several states in USA - and I got the answer that our solutions are unfortunately not suitable.

On other repeated story in our company is the technical approvals required by national building authorities. Why does it take several years to approve a product in one European country if the product has already been approved in several European countries before? The nationalism of these institutes slows down new innovations and lead to non-development.

New ideas, new methods, new thinking has to spread around the world. Although I might insult some of my dear Finnish customers, I want "True-Finns" out of the Finnish parliament. Maybe my dream becomes true in four years. Nationalism is just never good business for international companies, neither helps the industries to be more competitive.

April 11, 2011

Reputation of precast: not always perfect

If reputation is lost, reputation can be lost for a long time.

I was last week visiting Moscow and its neighboring areas. To visit Russia is always a good experience - tall, beautiful buildings surrounded by old relics in horrible condition. Most new residential buildings are today made by cast-in-place/in-situ - most old buildings from Soviet era from precast.

The huge precast factory towns of 60's and 70's are now history because people are now buying their apartments, they are not anymore "assigned" one. And when people buy, they also want quality and individualism. The old precast method where same element design was used in thousands of buildings were all the same, and all bad quality. The enclosed picture tells it all.

How can one convince apartment buyers that the new precast residential buildings can be of high quality? Very difficult - a lost reputition of this building method is very hard to gain back. All this despite that the facts are right, new technologies are excellent. Feelings are something no engineer can find good solutions for.

April 4, 2011

Design outsourcing is a reality of today - even in construction

When joining Peikko about 6 years ago I came to work for the field of construction from a totally another field, telecommunications. What struck me then was the lack of international collaboration in design, which was already daily bread in telecommunications then. In 6 years back there were not many companies which were even interested in outsourcing their design to third countries. Right now it is not only on the lips of many, it is really happening today. Just three concrete examples: 1) Northern European based structural design company is ramping up a large design office in India to participate in the local market, however, to also make basic design to its traditional home markets. 2) A Saudi precaster does not want to hire and locate expats to its company premises in Saudi Arabia; instead, it buys most of the required element drawings from a Philippine company. 3) Vietnamese entrepreneures have a small customer front-end organization in France, and tens of structural desginers working for Franch projects in Vietnam. In some Western European countries an AutoCAD drawing of a precasted wall element costs about 50 euro to make. What if the price is only 20%, the drawing is done in 50% of time and the quality is equal? Would this change to way we make business? And we are not talking about here only costs, but also design time and quality. Peikko's challenge is to be there where the design is made - to help and facilitate the design - and the current presence in 30 countries is only a beginning of our journey.

March 27, 2011

Whether we like it or not, weather is important

I had a fantastic opportunity to cross-country ski with my two boys, 6 and 8 years of age, at the beginning of March in my home town of Helsinki, Finland. The sun was shining, there was lots of snow and the boys had fun. To be able to do this in March has been a rare opportuity, but we truly enjoyed it. It has certainly been nice to have real winter and new records of snow in this decade. There is also another side of the story.

Local precasters and construction companies have been affected heavily by coping with excess snow and extreme cold temperatures, weeks of less than -20 Celsius. The output of the factories has reduced because the elemetns need more time to dry before they can be placed to outdoor storages. Also, assembly at the building sites has been seriously delayed when all labor is shoveling snow, not assembling elements.

This is just one story of the weather; there are many, many more simlar stories only in Europe. Somehow we need to cope with the new changes. Extreme conditions, whether cold, heat, dryness, rain -> all bring changes and many times increase costs. How are we all able to pass these extra costs to the end clients? Many times we never are. Let's now be prepared for the summer. If things go like it seems, it will be the wettest summer ever, or maby the driest, or maybe even the coolest. But for sure it will not be the most normal summer ever!

Let's enjoy the weather!