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„No!“ to routine work. Millions of euros of investment and automation bring Puidukoda to a new level

Puidukoda, a timber industry company located in Viljandi, South Estonia, sees automation of its processes – and thus reducing the amount of routine work – as a key to its growth.

Puidukoda will be 25 years old this year, already. But what has described the developments at the company during the past few years, is growth in effectiveness. Since 2017, the company has more than doubled its profitability. Since 2013, Puidukoda is owned by a foreign investor and is a part of France’s Rose Group, a group of companies specialising in wood construction since 1949.

Puidukoda’s sustainable growth is supported by the company’s technology shift and the automation of processes. This year alone, 4.2 million euros will be invested. „For financing, our own capital, as well as loans will be used,“ Eveli Opmann, the CEO of Puidukoda said.

Automatic packaging

As one example, the company is automating its packaging process of wood briquettes, implementing an industrial robot. „The new packaging equipment and the robot will let us automate packaging,“ Opmann explained. „This will reduce the amount of routine work and the human resources saved can be used on producing goods with higher added value.“

In addition, a new production building and a warehouse for materials will be built in Viljandi, South Estonia. „The purpose of the new building is to increase production capacity and improve the technology in use in finishing the products,“ Opmann said. „Both projects help us be more effective, automate processes and decrease the expenses on materials, as well as labour, per unit produced.“

By building the new warehouse, Puidukoda’s internal logistics will also be improved and the company’s environmental footprint decreased. „That will happen due to the decreasing number of kilometres, the forklifts have to drive,“ Opmann explained. „The materials warehouse and main production units will be closer to each other.“

Data-backed management

In addition, the company focuses on making decisions, based on data analysis, not gut feelings.

„Thanks to the constant availability of data, the company’s processes have become more transparent and making management decisions is quicker,“ Opmann told Invest Estonia.

In addition, focus has been set on implementing data collection in a way that entering the information to the system would happen only once, at the place where it is created. „It has made the processes more effective and there is a lot less of „fruitless hassle,“ Opmann said.

It has been realised at the company that in order to be successful, a lot of attention has to be paid to the ’working climate’ within the company. „A great team, together with fruitful cooperation, is usually the basis for success,“ Opmann stressed.

International reach

In addition, Puidukoda’s growth is supported by its international reach. „Our growth has been enabled by distribution of revenue between diferent georgrphic areas, the CEO of Puidukoda said. „We export to Europe, Asia, as well as America. When exports to one area decrease, this can be compensated by the other markets.“

According to Asso Uibo, Estonian Investment Agency’s Director of Regional Business Development in South Estonia, there has constant cooperation between Invest Estonia’s parent organisation Enterprise Estonia and Puidukoda. “Puidukoda has this far being using services related to entering new export markets and finding potential partners for export,” Uibo said, stressing the international reach of the company and its French owners.

Huge competition but a bright future ahead

According to Uibo, Puidukoda has fulfilled the prerequisites for a bright future ahead. „Using timber as a construction and finishing material is a growing trend“, he commented. „Huge market demand means competition and to deal with this, the company has to be a trustworthy partner for its customers, produce in an effective way and be flexible to react to the turbulence on the markets.“

It can be said that the whole region of South Estonia is in a way focused on the timber industry: in addition to Puidukoda, companies like Toftan, Graanul Invest, UPM-Kymmene Otepää, Lemeks grupp, Höövelliist, Barrus, Arcwood, Lasita Maja, Raitwood and others operate in the area.

„The sector creates about one fifth of the region’s added value, being the most important contributor to its economic development,“ Uibo said. „We can say that in the area mechanical wood processing, the region’s companies are in the world’s top, adding as much value to the material as possible.“ A key to the region’s success is the quality of the products: sawn wood, timber structures, weatherboards, wooden houses, plywood, etc. But according to Uibo, the sector will not stop there: the next step will be focusing more on chemical wood processing. „With the help of this, timber with low value and waste from the sector’s enterprises can be turned into more value and the raw material to be used to the fullest,“ Uibo explained.

It is also certain that digitalisation will be a huge benefit in the competition situation within the sector. „Digital solutions and implementing ERP enable the companies to manage their processes and resources more quickly and plan their activities in a more flexible way,“ Uibo stressed. „All those pieces of the puzzle contribute to Puidukoda’s success and create prerequisites of its growth to continue.“

Interested in opportunities in the timber industry in Estonia? Read more here or send us a request for 1:1 e-Consulting.

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