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Global manufacturing company HANZA invested €8M into a new sustainable production facility in Estonia

HANZA, a Swedish knowledge-based manufacturing company with operations all over the world, invested 8 million euros in a new sustainable production facility in Tartu, Estonia.

The CEO of HANZA’s Baltics cluster, Emöke Sogenbits said that during the pandemic they have seen a 300% growth from some medical sector clients. The new complex supports HANZA’s wish for sustainable manufacturing and makes it possible to increase manufacturing for existing and new clients. The facility is used both by clients from inside and outside of Estonia.

Four years of hard work has paid off

HANZA is a global manufacturing company founded back in 2008 with operations in Germany, Finland, Estonia, Poland, Czechia and China. From about the 1,700 emloyees, around 650 of them work from HANZA’s factories in Estonia. The headquarter is located in Sweden. The company’s client list consists of many well established brands such as ABB, Siemens and Saab. HANZA’s vision is to modernize and streamline the manufacturing industry as it plans to do with the new facility in Tartu.

Emöke Sogenbits, a well-regarded manager in the industry sector in Estonia, joined HANZA five years ago. Just one year later she purposefully began to work with the aim of opening a new manufacturing facility in Tartu.

Now the team’s four years of hard work have paid off. Directly adjacent to the existing sheet metal plant, a new plant with a footprint of about 12,000 square-meters will be built. The construction has already begun, and the opening is planned to take place in the first half of 2022.

“We have been working long and hard to get a new plant up and running. Right now, we need to transport large sheet metal parts from one part of the city to another with lorries. When the new factory is opened, the two facilities will be right next to each other, i.e. such transport of large parts will be eliminated and we will have made our manufacturing more sustainable,”  Sogenbits described.

As HANZA has operations in many countries, there is some competition about who will attract a new client. Then again, the profile of the clients varies from country to country. From the beginning of her career at HANZA, Sogenbits says that she has worked with the knowledge that corporations are sometimes purchased.

“If a deal is made, then the new owner will take a hard look at the facilities and start to think about what plants could be shut down and which ones could be transferred to other countries. My aim has been that the Tartu facility would be so high tech, efficient and lucrative that no one would even consider closing it down,” Sogenbits said .

Sogenbits sees manufacturing moving from Asia to Europe

One of the facilities that HANZA uses at the moment is scattered over four floors, according to Sogenbits, a sustainable and functional assembly plant should be on one floor. The new plant meets this requirement.

She is not ready to say that production will become faster because of the new plant but rather emphasizes on the efficiency,  sustainability and logistical win.

HANZA will continue to work with the aim of increasing production. As the new plant will be more efficient than the one used at the moment, Sogenbits does not see an immediate need to hire new workers.

But because, due to the pandemic, Sogenbits sees a demand for manufacturing to move from Asia to Europe, it could be possible that after a while HANZA’s workforce will need to be increased. The land bought a few years ago makes it possible to expand even further.

“I think thanks to coronavirus, the world’s attitude and corporate value chains will start to change. Increasingly more and more people and companies are starting to think about sustainability. We offer a one-stop-shop solution from sheet metal to cables and assembly,” Sogenbits said.

The ecological footprint of a product whit components that have been produced all over the world and shipped from country to country could do more harm to the planet than the usefulness the product provides.

“The pandemic has had an effect on us. Some of our clients from the medical sector have increased their orders about 300%. As we are a publicly listed company on the Nasdaq Stockholm’s main list, I can’t state any names at the moment, but one of the devices we make for our clients is used to analyze COVID-19 test results.”

Investment advisors help foreign-owned companies out

Asso Uibo started as an investment advisor at the Estonian Investment Agency (Invest Estonia) in 2015. He is focused on Southern Estonia and offers help to foreign-owned companies such as HANZA to meet their needs in Estonia. Although Uibo and Sogenbits have been in constant dialogue over the years, he says the given investment is a fruitful work of HANZA’s local team that is now paying off.

Uibo says that he has done some supportive measures for HANZA such as helping to match acquaintances with the local authorities in Tartu ain order to secure all-round support from the public sector and educational institutions.

Including Uibo, the Estonian Investment Agency has 17 advisors in total, 11 of whom work in Estonia and the remaining who work around the world.

From day to day, Uibo’s job is to be in contact with global companies that have established themselves in Tartu and Southern Estonia in general. Talking about his achievements, Uibo highlights Finnish forest industry company UPM-Kymmene Oyj, which opened a new plywood factory in Otepää in 2016. One of his successes is also a metal processing plant that is run by Rauameister.

“For example, when a company gives me feedback that they are short on workers with specific skills, I initiate negotiations with the local vocational training centre to start a pilot project to train people with the needed skills or turn to Work in Estonia to explore recruitment opportunities from abroad,” Uibo said.

HANZA is a company that has close ties with the school. Sogenbits sees that the school’s cooperation will be even greater in the coming years.

According to Uibo, the foreign investment center had their first contact with HANZA right before Sogenbits joined the company. And thanks to her taking the position, it has been in active contact ever since.

Uibo praises Sogenbits and other local managers of HANZA for the hard work that they have done over the years and for justifying the new investment in Tartu to the owners.

He sees that HANZA’s investment could be a signal for other companies that have not yet established themselves in Estonia. It also could have a positive effect on other industrial enterprises.

There are around ten projects that Uibo and his colleagues are working on at the moment that are related to Southern Estonia. Uibo hopes that the next success stories will be made public by the second quarter of the year.

Talking about his own personal goals, he wants to see a company in the field of biorefinery that adds more value to wood and other sources of biomass to invest in Estonia. In part, he hopes for this kind of investment to also increase the expertise of these areas.

Investors can find help in their home country

Besides regional investment advisors inside of Estonia that focus on foreign owned companies Invest Estonia has advisors in other countries as well.

“As a small country, Estonia has many important advantages, such as a shorter decision-making process and simplified access to decision-makers,” pointed out Christa Torm, the director of Business Development in Sweden. Anna Öberg who replaced Torm during her parental leave was responsible for the activities in Sweden.

“In January 2020, I helped to arrange an executive business lunch meeting with the prime-minister of Estonia, Jüri Ratas, in Stockholm. The aim of it being to receive feedback from Swedish investors that have invested into Estonia,” Öberg said.

One of the participants of event was Erik Stenfors, HANZA’s CEO, who gave feedback to the prime-minister about HANZA’s needs to grow in Estonia.

“One of the needs that was indicated by HANZA’s CEO was the quality of the labor force that is closely connected to vocational education. Both Enterprise Estonia and the Ministry of Education took action to accommodate investors’ needs to have access to a skilled labour force,” said Öberg.

For companies that are already established in Estonia, such as HANZA, advisors are always a phone call away, for example, to give information about support measures that have been introduced due to the pandemic.

👩‍💼 Want to know how to start investing in Estonia? We have a friendly robot-colleague Eia here to help you out and arrange a first meeting with your personal investment advisor. 

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