Sampo-Rosenlew: A Finnish maker of combine harvesters is heading for the top of the world
The story of Sampo-Rosenlew, which makes combine harvesters, is part of both the history and future of Finnish industry – the company is aiming for the top of the global market for harvesters. It is doing so by means such as strong partnerships, searching for completely new business models and taking advantage of digitalisation.
A few years ago, the people at Sampo-Rosenlew were examining the prospects of expanding into new markets.
“Populations are growing and there is an increasing need for food in Asian countries such as China and India, South America and particularly Africa. We gave some thought to how a company like ours could gain access to these new markets. The result was our alliance with the Indian company, Mahindra & Mahindra," says Jali Prihti, Chairman of the Board of Directors of Sampo-Rosenlew.
Synergy benefits appeared immediately since, as the world's largest tractor manufacturer, Mahindra & Mahindra did not produce its own combine harvesters. In addition, the market areas complemented each other.
"We examined the market areas of our two companies on the world map. Mahindra & Mahindra was present where our area comes to an end, and vice versa. This was a good basis on which to develop our operations," says Prihti.
The product has been the focal point of operations for more than 150 years
Sampo-Rosenlew has deep roots in the history of Finnish industry. The company was established in Pori in the mid-1800s. It began manufacturing agricultural machinery in the early 1900s. A genuine major innovation occurred in 1957, when the company launched its first drivable combine harvester. Around 50,000 of these have rolled off the production line since then.
Business operations began for the company in its current form, as Sampo-Rosenlew, in 1991. The company survived the break-up of the Soviet Union, the economic depression of the early 90s, and the changes brought by EU membership. Most sales are now based on exports, whereas domestic sales were once the focus. Success is based on good products.
“The product took centre-stage back then, and remains the key issue. In the turmoil of the 90s, we made the product fit for purpose and competitive. We then began to go international, initially in small, cautious steps. Exports were originally shipped to Sweden, Norway and the Soviet Union. We have exported our combine harvesters to 50-60 countries so far.”
The Ministry of Economic Affairs and Employment has been delighted by Sampo-Rosenlew’s capacity to reinvent itself.
"The situation has begun to turn around in Finland. The developments at Sampo-Rosenlew and other successful Finnish companies are most welcome. This turnaround has been brought about by the Government’s measures and the world economic cycle," comments Reijo Munther, Director at the Ministry of Economic Affairs and Employment.
Traditional business model reformed
With the help of Tekes, Sampo-Rosenlew began weighing up business models for the conquest of Asia, Africa and South America from a wholly new perspective. The project included the creation and roll-out of new business operations, and the development of processes and documentation to enable the replication of the model. What was the result?
“Based on the traditional business model, one sells and the other purchases, and the buyer receives a finished product. We began to look at how we might change this model,” explains Prihti.
In the business model now under development, the basic idea is that the parts or components are assembled in a factory in Finland and transported overseas by container. Sampo-Rosenlew then assembles the harvester in the target market, such as India.
"The model also involves softer values, such as training and technology transfer. We can train local staff to assemble the harvester, resulting in a locally produced combine harvester. Actual business activities have been created by the project,” says Prihti.
We are continuing to invest in Finland, with a centre of expertise being added to the Sampo-Rosenlew plant in Pori. All harvesting equipment, starting with combine harvesters and then perhaps other harvesting-related machines for food production, will be developed.
Self-driving machinery on the fields?
The Ministry hopes that many other Finnish companies wake up to the transformation brought by digitalisation.
“Sampo-Rosenlew was quickly out of the blocks with digitalisation. Others should follow their example. The changing economy requires an active approach from every company. Finnish companies have still only woken up to digitalisation to varying degrees; many have yet to consider the issue,” says Munther.
“No one is perhaps aware of the extent to which digitalisation will transform the world, including our businesses activities. For example, sensor technology, which can predict the failure and breakdown of products and enable preventative maintenance, heralds a truly major change,” says Prihti.
Autonomous combine harvesters are another example of digitalisation. Obstacles to self-driving cars include traffic legislation, but this does not apply to fields.
“There are already signs that autonomous machines are on their way to the agricultural sector. We are on the brink of change. However, it is also worth remembering that there is a long way to go before high-tech solutions can be introduced in developing markets, such as Africa,” Prihti says.
Chairman of the Board of Directors
Tel. +358 (0)207 550 607