“OSHINO Electronics Estonia is a good example of the importance of the role of the local manager and mutual trust in foreign investment,” says Riina Leminsky, Invest Estonia’s Director of Business Development in Germany. She recalled that when the Germans (OSHINO’s R&D center for Europe is located in Nuremberg, Germany) were seeking a supplier in the region in the early 2000s, they came to Pärnu mainly by chance.
“Although their first prototype failed, the good chemistry between directors Ingvar Kuusk and Karl Pensli was decisive. The Germans’ initial goal was to outsource to the parent company. But as a result of the quality, the qualifications of the employees and the proactive approach of the Estonian management, there were more and more opportunities for Estonians to come up with their own solutions and have a say in product development,” says Leminsky. She added that Estonia’s strengths are primarily in electronics and software solutions, and the Germans’ in design.
The first failure that brought the dream customer
Ingvar Kuusk, who was awarded this year’s Order of Merit of the City of Pärnu for his contribution to the development of the electronics industry, recalls how it all started. 20 years ago, there were only 5-7 people on the second floor of the old police school building in Paikuse, near Pärnu, burning with desire to start producing electronics. The only thing missing was a dream client. To find it, letters were sent to Estonian embassies in Europe in the hope that an entrepreneur or investor would find them. At one point, the head of OSHINO’s German unit came to visit them for 15-20 minutes to assess the situation. Some time later, a parcel arrived from Germany with the product and production instructions; it was then put into production. “We knew right away that the first batch had gone wrong. There was also a letter from OSHINO that it went bad, but also a new package with new instructions. We realised, it was serious,” Kuusk says.
The second time, everything was done right, and the factory became an OSHINO subcontractor. However, the Estonian unit was still looking for a strategic investor and the production was sold to the Finns. Within a few years, the number of employees increased from five to 120 and a new modern factory was built in Pärnu. However, the company, which had been called Paitec Elektroonika, was then again sold – this time, to the Swedish electronics producer NOTE.
OSHINO, however, was still interested in establishing itself in Pärnu and so Kuusk and Pensl started again in 2005. The company has now expanded to 3,600 square metres and employs nearly 70 people. The factory is one of the reasons, the Japanese ambassador visits Pärnu from time to time.
OSHINO Electronics Estonia is as well known and respected in its field as Estonian-founded Skype or Wise in the IT world. The company develops 99.9 per cent of its products for the British, German and, of course, Japanese car industries. Although they are primarily known for providing lighting solutions to the automotive industry, this currently accounts for only 30-40 per cent of OSHINO Electronics Estonia’s production portfolio, explains Kuusk. In addition to interior lighting solutions for cars, the company is developing electronic products for saunas, bus ticketing systems, parcel robots, and electric chargers.
Estonians have a courage to take the initiative and start innovating
“It’s quite typical for industrial investments to start with simpler solutions to gain the trust of the parent company in order to get involved in product development and offer its own solutions afterwards,” Leminsky explains. At the same time, she says, local leaders must also have the courage to be proactive and demonstrate the competence and capacity of their team to the headquarters. “Germans are often positively surprised by Estonians’ ingenuity and willingness to evolve and take on new challenges,” adds Leminsky.
“My day-to-day job is to approach the parent companies and, in cooperation with the Estonian side, encourage them to bring more competence to Estonia, to cooperate with local companies and universities,” Leminsky explains and states that she is available and ready to help local businesses when needed.
Kuusk confirms that the Estonian government has been very helpful. At the beginning of the COVID-19 pandemic, when the automotive industry was one of the first to be hit, the Estonian state came to the rescue and helped keep people employed. Last year, OSHINO Electronics Estonia was awarded the gold level of the final Family Friendly Employer label. The company underwent a comprehensive programme lasting nearly two years that has made their working environment more family and employee friendly than before.
Furthermore, OSHINO Electronics Estonia’s production has been upgraded with the help of EU grants. “We made our biggest investments in 2021,” Kuusk notes, seeing a bright future for the company in Pärnu.