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Thermory takes the traditional timber industry to a new level

The merger of two Estonian companies, which had been competitors for over twenty years, has created the world’s largest specialist manufacturer of thermally modified hardwood and sauna products: Thermory AS.

Thermory is not a traditional wood manufacturer. The company, which won the “Exporter of the Year” award this year at the Estonian Entrepreneurship Award competition, sells thermally modified architectural wood products. Their portfolio of wood types includes mainly white ash, Nordic pine, radiata pine (clear pine) and spruce – all thermally modified – plus some species traditionally used in sauna building like aspen, alder and magnolia. Most importantly, the company’s products are free from chemicals and are environmentally friendly. The company admits that due to its 20 years of targeted activity in foreign markets, it is relatively unknown in Estonia. This is why recognition from Estonia is especially valuable.

Thermory has simple reasons for its broad export activity: weather and seasonality. As the company mainly specialises in exterior products, it needs to take seasonality into account and make sure that the target markets balance each other out. If they were only focused on Northern Europe, the seasonal factor would significantly influence sales and profits. But when the terrace season in this region is over, it is just beginning in Australia and Asia, for example. Hence Thermory’s biggest markets are Finland, the United States and Germany. The furthest target countries are New Zealand, Japan, Chile and the Republic of South Africa.

Thermory’s CCO Exteriors, Katrin Reinaste-Parve, says that as a wood modifier and exporter, the company needs to keep its focus on product sales as well as purchasing and processing raw material: ‘When it comes to raw material, then its price, suitability for the company’s products and quality are very important. Secondly, we are focused on increasing production efficiency. During the last couple of years, we have mapped the organisation and efficiency of several production lines and implemented necessary changes to increase efficiency. In order to keep the business profitable, we have to keep our hand on the pulse of various business functions simultaneously. Success and profitability are outcomes of focusing on customers and employees, not just business objectives. We have a great team, who are the biggest fans of our products and eager to offer our valued customers the best experience possible. It´s thanks to our team that we have managed to maintain and grow our reach globally.’

Albeit Thermory’s name is relatively unknown in Estonia, many of us have seen their products here too. Thermory’s ash floors can be seen at Estonian top restaurants Noa and Noya, and the two eye-catching ceiling elements of the Western Harbour terminal in Helsinki have been made of thermally modified pine.

Reinaste-Parve says that the company has set its targets high: above 10 percent growth per year. ‘In order to achieve that, we need to be actively focused on understanding and fulfilling customer requirements, product development and innovative solutions. In a constantly changing environment one needs to think and act faster than others, even in the traditional timber business. We also direct more resources into brand development. We are consciously emphasising the quality of our products and not the low prices. The strong brand awareness in our field creates additional sales opportunities and helps us to stand out from competitors.’

This autumn saw the completion of the merger between Thermory and another large Estonian thermal wood producer Ha Serv OÜ. The latter was mainly focused on producing sauna materials and custom-made saunas under the brand name Auroom. After the merger, Thermory has become the world’s largest thermally modified wood and sauna material producer with production units based in the Harju and Tartu counties in Estonia as well as in Teuva in western Finland. In addition, the company owns sawmills in Estonia, Belarus and in their subsidiary in the United States. Thermory employs over 500 people. ‘One important goal for the next few years is to achieve a synergy effect between the two merged companies. The total turnover of the new company reaches 70 million euros and the joint goals are to grow much further,’ confirms Reinaste-Parve.

Meelis Kajandu, the founder and visionary of Thermory, and Kaido Veske, the largest shareholder of the merged company Ha Serv OÜ and representative of the Baltic Investment Fund, Livonia Partners, have seen the logic to merge for years already. The two equally successful companies which used to compete intensely for customers and suppliers now work toward the same goal. ‘Together we are able to think much bigger and to develop various business directions. It’s a win-win situation. 1+1 does not equal 2, but much more in our case,’ adds Meelis Kajandu.

The company admits that the market shows an increase in all kinds of producers of plastic- and composite products, but fortunately people’s awareness of the harmful effect of plastics is growing. ‘This is already demonstrated by EU regulations on banning plastic dishes, plastic bags and so on. This might look like small steps, but they are pivotal steps towards creating a healthy living environment,’ says Katrin Reinaste-Parve. At the same time, competitors of thermal wood products include coated wood products and products made of tropical wood. ‘We do not use tropical wood from rainforests. We work in the name of a healthy environment and that begins with the purchase of raw materials and applies to sales and installation as well. The thermal wood “recipe” we use has been developed by our own thermal specialists and it is unique to Thermory. Thermory’s technology has proved itself during our 21 years of activity in varying climatic conditions all around the world.’

Meelis Kajandu, the founder of the company also recalls that when Thermory (then called Brenstol OÜ) started to use thermal technology in 2001, the general public awareness of environmental issues was quite low. Kajandu saw the huge potential of the product. Modern thermal wood technology was developed by Finns in the 1990s, making it quite a new and exciting technology back then. In the years that followed we have also contributed to the development of this technology on the basis of our own experience, by providing feedback and collaborating with leading producers in the field of thermal wood technology.

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