The Nordic logistics mojo is alive and well in Finland, where in September 2004, homegrown manufacturer Nokian Tires announced a $21-million investment in a new 365,985-
With a population of 5.2 million and a July unemployment rate of 7.8 percent, Finland joined the EU in 1995 and is the only Nordic country to have adopted the euro as its currency. But its chief attribute going into 2005 may be its long border with Russia, where so much FDI is aimed across multiple industrial and commercial sectors. In fact, the U.S. and Foreign Commercial Service reports that some 40 percent of the EU's road shipments to Russia are either shipped from Finland or arrive via Finland. Such pronounced investment has much to do with the country's high-quality rail and road network: The gauge of the former matches Russia's, and the scope of the latter is being extended through a gateway highway concept at the Vaalimaa border crossing with Russia. That land infrastructure is backed by some 23 seaports. The ports of Hamina, Kotka and Mustola are the nearest to the Russian border, and concentrate on forestry goods, bulk cargo and free zone activities. Of course, the aforementioned Nokia is known for its namesake mobile phone company, which employs 52,000 worldwide. That company's heft is evident in one key statistic: in 2002, the value of mobile phone exports ($6.3 billion) constituted 53 percent of the country's total high-tech export value. Overall, however, the country's three major exporting sectors are very balanced, with the electrotechnical; metal, machinery and vehicle; and forestry industries each garnering around 27 percent of total Finnish exports. That forestry sector is aiming toward Asia for growth as much as it is toward the U.S. and Europe.
In a country known for its forestry and construction products, it comes as no surprise that several major projects fall within those sectors. In May 2004, the World Investment Conference recognized Deere & Co.'s Timberjack cut-to-length machinery manufacturing project in Joensuu as its "Best Investment in Europe 2004." The investment doubled the production capacity of the Joensuu factory. Such capacity growth worldwide helped Deere & Co.'s construction and forestry division show third quarter 2004 year-to-date sales growth of 51 percent over 2003.
In June 2004, production began at Icopal Group's consolidated bitumen shingle manufacturing complex in Espoo. Denmark-based Icopal cited cost savings and streamlined efficiency of Finnish operations for the project, valued at several million dollars. The company expects to grow annual production by 20 percent.
Even though Finland is in close proximity to Eastern European nations that have begun offering substantial tax holidays and other subsidies to foreign investors, the country has traditionally followed the Canadian "lift all boats" model of business climate improvement, focusing on measures to improve education and infrastructure. In fact, the nation's tax rate on capital income and corporate income was raised from 28 percent to 29 percent from the beginning of year 2000. Nevertheless, foreign-owned companies employed some 17 percent of the total work force in 2002, having multiplied their presence substantially over the previous five years in an environment that is among the world's most transparent when it comes to business practices and public administration.
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