Tikkurila is expanding its production network with the opening of a new factory in Almaty, Kazakhstan, in April 2015. The factory will produce a limited range of water-borne decorative paints to meet local market needs.
"This investment supports Tikkurila's strategy of profitable growth. Local production will enable us to grow our business in Kazakhstan and the surrounding regions. The project also fits well with Kazakhstan's transition to a green economy," says Erkki Järvinen, President and CEO of Tikkurila. "The economic growth has been robust in the past years in Kazakhstan. We believe that the paint consumption will grow from the current relatively low level. In addition, the increasing interest in Kazakhstan towards high-quality, safe, and environmentally sustainable products supports our operations."
The factory will pilot a novel production concept developed by Tikkurila. Designed to enable the quick launch of production in a new market, the concept will typically involve a fairly small and flexible unit focused on the production of a limited range of water-borne products. The risks associated with entering a new market are smaller, thanks to low initial investment costs and low operating costs. The investment totals less than EUR 1 million.
"The factory will make use of an efficient operating model and new technologies. A flexible operation that can be adjusted to match demand and customer needs means we will be able to provide a high level of customer service. Production is efficient even with small batches, while at the same time, we can fairly easily increase capacity," says Petri Miettinen, Senior Vice President, Supply Chain Management & HSEQ at Tikkurila. "To further boost efficiency, the Kazakhstan factory's logistics, production and procurement will be managed from St. Petersburg, Russia, where we have major production in. This will also mean cost savings in logistics."
Tikkurila has had operations in Kazakhstan since 2006, and it currently employs around 30 people in the country. Tikkurila, which is the market leader in Kazakhstan in premium products, is the first Western paint producer starting local production in the country. Tikkurila has production in ten countries, with Kazakhstan being the most recent addition to the list.
