COMPONENTAcomponenta.smartpage.fi/history/pdf/Componenta_History...4 componenta in 1921 the foundry...

COMPONENTA A Company with Nine Lives

Contents

1918 The Iron and MeTal Foundry SuoMI IS eSTablIShed

1920 sSTock MarkeTS craSh, Foundry ThrIveS

1939–1943ProducTS oF The Foundry are needed In war and Peace

1948–1963 develoPMenT oF own ProducTS

The 1970 s and 1980 snew ManageMenT, and bIg decISIonS

The late 1980 sSanTaSalo In The STock exchange, and The coMPany SPlITS In Two

1991–1993receSSIon In FInland, a whIrlwInd In The coMPany

1993–2003The new MIllennIuM arrIveS, and Today’S coMPonenTa IS born

2003–2008new dIrecTIonS – The neTherlandS and Turkey

cas t i ron component for heavy t ruck indus try.

In November 2008 it has been 90 years since foreman Matti Lehtonen

started foundry business in Helsinki, Finland. Over the years, through

organic growth and acquisitions, the company has grown from small Finnish

foundry into international Group. Today, Componenta is the second largest

independent cast component supplier in Europe.

The Group has production facilities in addition to Finland in Turkey,

the Netherlands and Sweden, and some 5,000 employees.

Already in the beginning the owner of Rauta- ja Metallivalimo Suomi

(Iron and Metal Foundry Finland) stated that the main factors creating

success will be high quality, competitive prices and quick deliveries.

In addition to these, the key factor was good customer service, based on

understanding and fulfilling the customers’ needs. These issues still form

the basis of Componenta’s competitiveness.

A lot has happened in the history of Componenta. During the decades

the family company has gone through good and bad times, wars and

recession, each of its had had its effect in the company’s operations.

Flexibility, quick decision making and adjustment have often been needed

in the ever changing environment.

Componenta’s story as written by Harri and Selim Saukkomaa begins in

1918 and ends in the autumn of 2008. Pictures of the company’s operations

and products are used to illustrate the story.

Foreword

2 componenta

chass i s for t i l e mach ine cas t for lokomo, we igh ing 2 ,840 k i logr ams .

a company with nine l ive s 3

Before going into what took place at the law

offices of Arthur Söderholm on 4 November 1918,

it is a good idea to look back nine years to 1908.

Matti Lehtonen, the co-founder of what

was to be the Iron and Metal Foundry Suomi

(Rauta- ja Metallivalimo Suomi – RMS), had set

up his first company. However, that company

did not last more than three years in the intense

competition that predominated the iron industry

in the first years of the 20th century, but this

did not discourage the diligent young man from

Tammela.

When he established the Suomi Foundry,

Matti Lehtonen was already 50 years old. The

other founder, businessman Viktor Tolska, had

bought an iron and metal foundry from a com-

pany called Santasaaren Tehtaat earlier in 1918

for 40,000 Finnish marks. Later Lehtonen bought

out Tolska’s share for 20,000 marks.

The collapse of Russia brought uncertainty.

Before 1917, Finnish foundries could make

significant profits from deliveries to from the

Russian munitions and shipbuilding industries,

and from repair work, but these times were

already in the past.

In the first year, the new company mainly

got orders for fairly small parts for ships. These

accounted for 40 percent of total invoicing for

1918. A total of 40 tons of cast iron objects were

produced by the Suomi Foundry in 1918. In the

following year the figure was nearly 96 tons.

The most important customers at that

time were the construction office of the City

of Helsinki, the Verkkosaari sawmill, the Ahjo

machine factory, as well as Hankkija and Elanto.

The Hakaniemi machine shop and the Arabia

ceramics factory became clients in the following

year. Decisions on the acquisitions of most of

these companies were the responsibility of

the same men who had been trained by Matti

Lehtonen, or with whom he had worked at the

Hietalahti shipyard.


1918The Iron and Metal Foundry Suomi is established

founder of the company mat t i l ehtonen, man -ag ing d ir ector 1 91 8–1 939.

4 componenta

in 1921 the foundry moved from Flemingin-

katu 34 to Kristiinankatu (today, Kirstinkatu) 8,

and Matti Lehtonen implemented a massive re-

furbishment. Finally, on 29 March 1922, the whole

foundry was placed under the name of Matti

Lehtonen. The price was 150,000 Finnish marks.

There were certain conditions that were set for

the deal, but Lehtonen was pleased. He finally had

a foundry of his own. At the time he took his son,

B. M. Lehtonen, to work as the managing clerk,

and to deal with various office matters.

The working hours and other regulations were

straightforward. The working day began at seven

in the morning, and ended at four in the after-

noon. The lunch hour was form 11 to 12. The work-

ers were expected to be on the premises at the

beginning of the work shift, in their work clothes.

Leaving the post was not permitted before the

end of the work day or the before the beginning

of a break.

In the early 1920s, the industry had started to

take wind, and a boom in the sector was starting.

Matti Lehtonen’s company benefited from this as

well. Agricultural output was also growing stead-

ily in Finland.

By early 1924, the foundry had established

good momentum, and had a foothold on the

Finnish market. However, in that year, a fire

broke out at Kristiinankatu 8. All of the foun-

dry’s activities were put on hold for a week.

The 1920s was a good decade for by and large,

as it was a time of increasing mechanisation in

Finland. However, at the end of the decade, the

global economy took a downturn. First, in 1928

a poor crop was a setback for Finnish agriculture,

and in October 1929, Black Thursday occurred on

the New York Stock Exchange, which brought on

the Great Depression.

As the 1920s had been primarily profitable

for the foundry, Matti Lehtonen decided to rent

a property from the city for a new building, on

Elimäenkatu in Vallila. The new building had

6,000 cubic metres of space. The depression was

felt in the order books, but with the help of a

loan, and the resources accumulated in the 1920s,

Suomi Foundry did better in the period than

most Finnish companies.

In the autumn of 1931 it seemed that the

worst of the turbulence might have been over,

and that the economy would start improving.

Even the Finnish mark was taken off the gold

standard, following the lead of the British pound.

The home market went into recovery.

From 1932 to 1937, the number of people

employed in Finland grew by 80 percent. Finally,

thanks to the upturn that followed the depres-

sion, Matti Lehtonen was able to buy the land

that the foundry was built on, which had previ-

ously been leased, as well as the property next

1920 s Stock markets crash, foundry thrives

cas t i ron component for mach ine bu i ld ing indus try.


door. The foundry building was expanded to the

new property already in the same year. Matti

Lehtonen actually went into retirement once in

the early 1930s, but he found it so boring that he

asked his son for a job as foreman at the foundry.

He got the job.

In the late 1930s, the foundry was in full

swing. Spare parts for threshing machines and

for machines used in rubber manufacture sold

at an incredible rate. The number of employees

began to get close to 100, and there were even

about ten women who were employed there. In

1938, the foundry’s turnover was nearly 7 million

marks. Whereas 100 tons of goods were produced

in 1919, this had risen to more than 1,500 tons.

Industrialist Matti Lehtonen died at the age

of 70 on 28 January 1939. The foundry itself,

its assets and its liabilities, were passed on to

his only son, B. M. Lehtonen. All the rest of the

property went to the widow, Amanda Lehtonen.

1939–1943Products of the foundry are needed in war and peace

on 30 novemBer, 1939, war broke out with the

Soviet Union. The Second World War had been

raging elsewhere since September. The year 1939

had still been better than ever. Output reached

1,662 tons, and more foreign iron was imported

than ever before – 750 tons. When the Winter

War broke out, the foundry quickly began to

manufacture cast-iron stoves and aluminium

horse collars. The raw material for the stoves

came from scrap iron, for which public collection

drives were organised, and the horse collars were

made from the aluminium frames of planes that

had been short down.

B. M. Lehtonen, the manager of the foundry

at the time, was a patriotic man. It was at his in-

sistence, that war materiel production was given mould ing of whee l .

cas t i ron component for mach ine bu i ld ing indus try.

6 componenta

a higher priority than civilian production.

The main products were hand grenades, as

well as landmines. B. M. Lehtonen also personally

took part in the development of the legendary

Suomi hand grenade. B. M. Lehtonen was proud

to have been able to take part in this way in the

fight for his country. He charged the lowest pos-

sible price for all of the goods that went to the

Defence Forces. He even managed to set up his

own Civil Guard unit at the foundry, which held

exercises on the upper floor so that the sound of

boots marching could be heard downstairs.

Toward the end of the war, a new challenge

faced the foundry. The Defence Forces needed

cylinders for the Ford V8 engines of its vehicles.

No more spare parts were available from the

United States, and the Finnish army’s vehicles

were in danger of irreparably breaking down in

the middle of a war. However, Finland did not

have the moulds needed to cast Ford cylinders.

Kalle Kuulas, head foreman of the factory at the

time, travelled through Sweden to Germany

under difficult conditions to find moulds for

casting cylinders at the Ford factory. The latest

moulds were not available, but the technical

manager of the Ford factory remembered that

he had seen the old moulds gathering dust in

a storeroom. They were found, and they were

delivered to Finland. A few hundred cylinders

were cast before the war ended.

Finland and the Soviet Union signed an

interim peace agreement on 19 September 1944.

The Prime Minister at the time, J. K. Paasikivi,

wrote in his diary, »A terrible treaty«. The

Continuation War, which had gone on for more

than three years, was finally over. Finland had

achieved a defensive victory, which secured the

country’s independence.

At the Teheran Conference in 1943, the Soviet

Union persuaded the United States and Great

Britain to agree to its demand that Finland pay

war reparations. So after all of the human suffer-

ing, the Soviet Union submitted a massive bill

to Finland. It was calculated that at least 343,636

train cars full of goods would be needed to pay

the reparations. Under the conditions that were

set, the reparations were to be paid by the end of

1950, although it was ultimately extended to the

year 1952. The estimated value of the war repara-

tions was 300 million US dollars.

It was quite unexpected that the list of goods

to be included in the reparations contained

far more metal industry products than wood

industry products, which Finland would have

been able to produce in large quantities. Suomi

Foundry was one of the biggest suppliers of the

engineering industry in producing war repara-

tion goods. The list of goods to be included in the

foundry’s output included »about 65,000 temper-

ed cast-iron wheels, or so-called Griffin wheels«.

The timetables were tight and the pressure

became unbearable. Production of the wheels

was difficult because the foundry lacked earlier

experience in the manufacture of Griffin wheels,

and nearly all of the wheels fell apart. The

foundry was familiar with producing traditional

bridge crane wheels, which were much easier to

manufacture than Griffin wheels. B. M. Lehtonen

tried to describe the difficulties in the produc-

tion of the wheels to the managers of Soteva, the

body set up to administer the delivery of the war

reparations. Soteva put pressure on Lehtonen,

appealing to his »love of country« to persuade

him to keep trying. After all of the trouble,

Soteva did not want to hand over the work to

anyone else, although the Rosenlew engineering

company in Pori was ready to give it a try.

Finally, the problem with the Griffin wheels

was solved through an educational visit to the

United States, and a loan from the Bank of

Finland. Production started off, and output for

1948 set a record for the foundry, which was not

broken until well into the 1980s. Six thousand

tons of castings were made.


check ing of the whee l cas ts .

k al l e järv inen and valde forsb lom »pump« large cas t ing.

8 componenta

j y lhä d i sc fr ames , we igh ing se ven tons , were cas t a lot in he l s ink i and la t er in the i i sa lm i foundry.

f e t t l ing shop in the 1 940s .


the money taps that were opened by the

Griffin wheels were closed again in June 1948

when the value of war reparations deliveries was

reduced by 50 percent, and some goods were

dropped from the list altogether – the Griffin

wheels included. This »great act of forgiveness«

was good for Finland, but for the foundry, it was

a disaster. Much had been staked on the produc-

tion of war reparation goods and, the construc-

tion of a new foundry building in Helsiwnki, for

instance, had to be postponed.

At the foundry it was noted that relying

exclusively on orders was precarious. The foun-

dry needed to get some of its own products into

its selection to compensate for times when there

were few orders. The first of these products were

moulds for pressure pipes, which the foundry had

manufactured on a subcontracting basis already

since the 1920s for the Helsinki City Waterworks.

When B. M. Lehtonen’s son Yrjö M. Lehtonen

was named the company’s technical and com-

mercial director in the 1960s, he quickly began to

push through innovations.

Suomi Foundry was now producing two

thirds of its turnover through its own products.

Custom-made castings were made for demanding

customers. These jobs kept the foundry’s techni-

cal know-how at the highest level. The customers

included for example Wärtsilä and Fiskars. Yrjö

M. Lehtonen was also good at establishing new

customer relationships, as he often directly ap-

proached the middle management of companies

and their expert decision-makers.

At the beginning of 1963, casting operations

moved to a new location on Teollisuuskatu.

The basic frame of the building had been built

already in 1948, but the end of war reparation

deliveries postponed the move to the premises.

The 1960s were a time of change and modernisa-

tion. A devaluation of the Finnish mark opened

export markets. The foundry began to export

heavily to Sweden and Norway.

cas t i ron components for mach ine bu i ld ing indus try.

1948–1963 Development of own products

10 componenta

which was equivalent to nearly the entire turno-

ver of one year.

When the Iisalmi foundry started up, there

were 46 employees. However, the Helsinki work-

ers did not want to go to Iisalmi. The older ones

opted for retirement, and the younger ones went

to other sections of the company, or to completely

different foundries. The mid-1970s was a prob-

lematic time in other ways as well. The economic

slump hurt Suomi Foundry badly. Big clients

such as Wärtsilä and Lokomo sharply cut back on

their orders. The year 1976 was just barely rescued

by substantial orders from the Norwegian Esco

Armaturfabrik. Turnover nevertheless declined

by one percent over the previous year. In 1974 the

company’s name was changed to Suomivalimo Oy.

Finally, at the end of 1977 the company’s board

of directors decided to close down the Helsinki

foundry completely. Originally the idea had been

that the Helsinki foundry should continue until

the turn of the decade, at least. The minutes of

the meeting contained only a brief notation, but

for Yrjö M. Lehtonen it was one of the most dif-

ficult decisions of his career. However, ultimately

the decision proved to be exactly the right move.

Iisalmi worked very well as a location for the

foundry.

In the early 1980s the numbers in the annual

report looked grim again. Olavi Jaakkola, who had

started on the board of Suomivalimo in 1979, and

Olli Arppe looked serious as they listened to a re-

port by Yrjö M. Lehtonen. Sales were not happen-

ing, and turnover had remained at the previous

year’s level of 32 million marks. The recession was

getting worse again, and was expected to continue

through 1982. Some comfort came from a deal

with the Soviet Union worth 2.5 million marks.

According to Yrjö M. Lehtonen, the deal secured

the company’s employment, and helped it achieve

its goal for that year. Nevertheless the company’s

result for 1981–1983 was in the red. Something

new had to be done.

on 13 feBruary 1973 a new management took

over at Suomi Foundry. At a meeting of the

father and son it was decided that B. M. Lehto-

nen, who was already 72 years old, should step

aside from his position as managing director, and

that he should be replaced by 42-year-old Yrjö

M. Lehtonen. His mind was buzzing with new

ideas and modes of operation. He also decided at

the same time that he had to arrange a change of

generation in good time with his own sons. This

was in the interests of both the father and the

company.

New regulations for working conditions, and

the massive costs that they would impose on the

Helsinki foundry, were one reason why Yrjö M.

Lehtonen decided to close down the foundry in

Helsinki, and to set up a new one in Iisalmi in

1975. The Mayor of Helsinki was also putting

pressure on heavy industry to leave the Finnish

capital. A plot of land covering 7.5 hectares was

bought in Iisalmi. The whole investment would

end up costing about ten million Finnish marks,

The 1970 s and 1980 s New management, and big decisions

cas t i ron component for mach ine bu i ld ing indus try -

a company with nine l ive s 1 1

Mika Kamensky, a trainer and consultant in

corporate economics, was brought into the com-

pany to help management. Kamensky believed

that the time of strategic management would

come to Finland too, and he wanted Suomivalimo

to be one of the first Finnish companies in which

it was tried. Finally he was invited to join the

board of directors of Suomivalimo, and later to

those of JOT Companies, and Santasalo-Gears.

After Kamensky’s analyses it was apparent

that the only sensible survival strategy for the

company was to use corporate purchases for

growth in both the market share and business

base. Although times were hard, money in itself

was not a problem. Yrjö M. Lehtonen had good

relations with the Union Bank of Finland.

The first acquisition, in 1984, was the Iisalmi

engineering works, which Partek wanted to get

rid of. The next company to be bought, in the

same year, was pump importer and manufacturer

Tekno-Montan, which went for three million

marks, and whose valuable property in Hert-

toniemi was soon sold off for seven million.

This was sufficient for a down payment for the

purchase of the Nieminen Foundry in December

of the same year. Another foundry, Satakun-

nan Valu was bought in January 1985, also at a

fairly low price. In September of the same year

Suomivalimo bought the Högfors Foundry, which

was rich in tradition. This was followed by a few

more corporate purchases, which helped the

concern grow. One of the most important was

the purchase of Santasalo Gears in 1986, which

opened completely new markets to Suomivalimo.

cas t i ron gearbox beam for heavy t ruck indus try.

b .m . l ehtonen and yr jö m . l ehtonen agreed on tr ansfer of power in 1 973 .

12 componenta

after the purchase, Santasalo-Gears started

up as an independent limited liability company.

Santasalo was listed on the Stock Exchange in

1988. World stock markets had crashed exactly a

year before the share issue, but in 1988 the mar-

ket was favourable. All of Santasalo’s shares were

subscribed to in just a few hours. The Lehtonen

family kept 77 percent of the shares, but for the

first time, the Lehtonen family company had

taken the company onto the stock market.

Yrjö M. Lehtonen’s solution was implemented

in October 1990. As a result, Santasalo-Gears was

placed under the ownership of Heikki Lehtonen.

As a result of the decision, the owners of the JOT

Companies were Ari, Antti, Anna-Maria and

Yrjö M. Lehtonen, who however, kept the voting

rights in his hands.

Antti Lehtonen was named President of JOT

Companies. Heikki Lehtonen would head his

own company, Santasalo-Gears.

cas t i ron s tator fr ame for mach ine bu i ld ing indus try.

The late 1980 sSantasalo in the Stock Exchange, and the company splits in two

he ikk i l ehtonen s tar t ed as pr es ident and ceo of santasalo -gears in 1 987.


yrjö julin, the director of the foundry

group of JOT Companies Ltd., knew already in

the summer of 1991 that not things were not as

they should have been. In the autumn it became

a certainty. Finland would face unprecedented

mass unemployment and a deepening recession

in the following years.

On the financial markets, Finland teetered

on the brink of bankruptcy, and intervention by

the International Monetary Fund. The »strong

mark« policy had been the official doctrine of the

central bank and Finnish politicians. With that

policy in mind, Finnish companies had financed

their operations with loans denominated in for-

eign currencies, which appeared to be cheap, but

which contained a bomb hidden inside.

Antti Lehtonen, the President of the group,

lamented: »The worst of this is not the depth

of the recession, but its expected duration.«

Financial markets had begun to go out of control

already in the late 1980s, and the final nail in the

coffin was when the Finnish mark was left to

float in 1992. According to the most optimistic

assessments, the economy would start to recover

already in 1992. Pessimists said that realistic

signs of recovery might be seen in the late 1990s.

It turned out later that the turning point was

actually October of 1993.

However, Antti Lehtonen insisted in the JOT

Companies newsletter that the group would

continue its battle against »the forces of nature«.

Invoicing declined by as much as 20 percent during

the recession.

The courageous battle did have its victims.

The foreign currency loans taken out by JOT

Companies had not been sufficiently secured, so

the exchange rate losses had to be paid off. JOT

Companies had fallen into debt in the 1980s, when

it made many corporate purchases. Now the time

for paying back the loans came in the middle of

the recession, and in foreign currency, which had

become more expensive.

Although the company had experienced many

difficult times during its 75 years, the recession of

the early 1990s was a question of life and death for

the family company.

The solution was that Santasalo-Gears bought

24 percent of the shares of JOT Companies from

the beginning of 1993. In this way, Ari and Antti

Lehtonen got money, which they reinvested in

the company. The company managed to get the

dangerous haemorrhage to stop momentarily.

However, the situation was not permanently

resolved. Money taps had been cut off to many

companies in 1993. The future of JOT Companies

required more decisions. Heikki Lehtonen had to

decide in the spring of 1993 how to rescue the fam-

ily company. The only solution was for Santasalo-

Gears to buy all shares of JOT Companies.

At the same time Heikki Lehtonen had to take

the biggest risk of his life. He became the main

owner and manager of the family company.

These decisions created the foundation for

today’s Componenta. The new name was not

acquired until much later, from Sweden.

cas t i ron crossmember for heavy truck indus try.

1991–1993Recession in Finland, a whirlwind in the company

14 componenta

Not all of the purchases were successful. In

1997 the Group bought two companies: Asko

Components, and the business operations of the

Swedish Componenta Industri. After the corpo-

rate acquisitions, JOT Components grew to be

the largest producer of cast metal and malleable

components in the Nordic Countries. Turnover

in the Group exceeded one billion marks for the

first time.

As a result of the acquisition of the Swed-

ish company, more than half of the production

of JOT Components was in Sweden. Half of

the employees were also in Sweden and half in

Finland.

The Swedish foundries proved to be too

costly in light of the condition of the companies.

In retrospect, the corporate acquisition proved

to be a mistake. The buyers did not get a chance

to examine the company closely enough, because

the company that was being bought was in the

process of being listed on the stock exchange.

The Swedish company had seven units, only

two of which were in the same line of business

as JOT Components. The buyers needed to

get rid of five of the units. Ultimately the two

remaining units were merged with the business

operations of the buyer.

The years that followed the purchase that

was made in 1997 were a very trying period.

Companies were shut down and others were re-

organised. The management of the concern had

to spend all of its time on reorganisation.

1993–2003The new Millennium arrives, and today’s Componenta is born

cas t i ron p lane t carr i er for d i e se l & w ind indus try.

the open ing of santasalo’s p lant in ch ina was ce lebr at ed in 1 997.

in the 1990s the Santasalo-JOT Group grew

internationally. The growth required plenty of

capital – both monetary and intellectual.

The company’s narrow management resources

were stretched to the limit, when the companies

that had been acquired needed to be taken

over and combined with the existing working

methods of the Group.

a company with nine l ive s 1 5

2003–2008New directions – the Netherlands and Turkey

In retrospect, JOT Components calculated that

the Swedish company had cost too much, but

even more costly was the time that the manage-

ment spent on reorganisation alone. That proved

to be more difficult than anyone would have

imagined.

The decision was made in 2003 to shut down

the Swedish foundry in Alvesta. The Swedish

labour union movement appealed the closure

to the European Commission. Meanwhile, the

Commission decided in 2004 that real estate ac-

quisitions by the City of Karkkila had amounted

to illegal subsidies for Componenta. Compo-

nenta has appealed the decision to the European

Court of Justice. The process is still underway.

In 1999 Heikki Lehtonen was contacted by

Metso Corporation, which manufactured gears

in Rautpohja in Jyväskylä. Metso wanted to buy

Santasalo’s gear business. Metso had not been

interested in a new factory in China, but it was

interested in factories in Finland, Germany, and

Canada.

The deal was signed in late November 1999.

At the same time, the corporation decided to

concentrate on components needed by industry.

One round was over, and the company was again

a foundry enterprise.

In 2001, the other owner of the factory in

China, SEW-Eurodrive, bought out Compo-

nenta’s share. The company got its own back.

The Chinese gear factory has grown quickly, and

now it is the world’s largest gear factory and the

market leader in China.

Choosing the strategy was not easy. The

company’s management and its main owner,

Heikki Lehtonen, saw that foundry products

could grow to be large players in Europe.

The company had gone back to its roots,

and from 2000 it has operated under the name

Componenta. The name came with the Swedish

corporate purchase. It is all that was left over

from that deal.

componenta was not spared the effects of the

stagnation of the world economy in 2000–2001.

The internet bubble which had emerged in the

economy burst in 2000, and in 2001, the 9/11 at-

tacks in New York dampened economic growth.

In 2001 Componenta did not reach the goals that

had been set for its result, and 2002 also looked

like it would be difficult.

At the same time, the reorganisation of the

Swedish companies continued. The company’s

management did not have time to create a strat-

egy for the future.

Strategy work became possible for 2002.

Componenta defined its strategy through 2006.

In his President’s Review in the Componenta

Annual Report for 2002, Heikki Lehtonen pre-

dicted that Componenta will become »a compa-

ny that is the preferred engineering co-operation

partner by 2006«.

Componenta had made the decision to close

down the Osby machine shop in Sweden, whose

profitability hinged on a single client. When the

biggest client, Scania, chose another subcontrac-


16 componenta

tor, profits turned to losses. The machine shop

was closed down in 2002. Moving the Alvesta

foundry to Karkkila in 2004 brought an end to

the reorganisation phase of the units bought in

Sweden.

In March 2005 Componenta bought a major-

ity holding in the Dutch foundry company De

Globe. Shortly before that Componenta had

given up its minority holding in Thermia, which

was specialised in heating. The money from the

sale allowed it to pay for the Dutch acquisition.

Later it emerged that the foundry in the

Netherlands was a good acquisition. Compo-

nenta put De Globe into the black. The price that

was paid was not too high in comparison with its

performance capacity. The sales and clientele of

Componenta and De Globe complemented each

other.

An ambitious goal began to take shape as

Componenta’s strategy. The company wanted

to be the European market leader of cast com-

ponents by 2010. The goal was approved by the

Componenta Board of Directors in 2005.

The new, ambitious plan called for both or-

ganic growth and corporate purchases.

In 2005 moves were made to turn the Dutch

foundry into part of the Componenta organisa-

tion and corporate culture. Improvements had

been made at the Karkkila foundry, and ad-

ditional production capacity had been built in

Pietarsaari as well.

On a personal level Heikki Lehtonen was tak-

ing a giant leap in March 2006. He was sitting in

a plane, looking down at the sea of light of a large

city. There were ships anchored in the sea. There

were cars on the roads causing congestion, even

though it was the evening. The sharp minarets of

mosques rose to the sky.

Lehtonen wondered what he was doing in

this city, which was not familiar to him, and in

this country whose culture and language were

completely foreign to him.

measur ing at the ne w mach ine shop in orhangaz i , turke y.

orhangaz i ’ s ne w mach ine shop was taken in use in autumn 2008.


He soon landed in Istanbul, and that is where

a process began, which led to the biggest corpo-

rate acquisition of Componenta’s history.

Componenta had learned that the Turkish

Koc Group wanted to sell its foundry company

Döktas. When Lehtonen met with the com-

pany’s management and visited the Döktas foun-

dry, he sighed with relief. The company was in

good shape, the management knew what it was

doing, and fortunately, spoke English.

Negotiations were held in the months that followed. Before August Componenta did not know if it was in the final stretch in the competition, which involved many other players in addition to Componenta. In August the dealings turned serious. Componenta needed to organise financing, which was not at all easy. In the final moments, a grouping of banks was brought on board to finance the deal worth more than eur 150 million.

Componenta had made a tiger’s leap. It had

bought a company that produced high-quality

cast iron castings, aluminium castings, and rims

for car wheels. The purchase put Componenta

among the leading European companies:

Componenta was now Europe’s second largest

independent cast component company. Person-

nel nearly doubled: Componenta had 5,250

people working for it at the end of 2006. Only

22 percent of the company’s employees were

Finnish. Componenta also became a multicul-

tural company.

Componenta’s President Heikki Lehtonen

believes that there is a resilience in the genetic

heredity of the family company. During its 90

years the company has survived wars, stock mar-

ket crashes, global upheavals, its own mistakes,

and changes in its clientele and the market. The

Lehtonen family has experienced many chal-

lenging times over a period of four generations.

Componenta had proven to be a company

with nine lives – at least.

cas t a lum in ium crossmember for automot iv e indus try.

1 8 componenta


core s tor age a t the orhangaz i foundry.

text

Selim Saukkomaa and Harri Saukkomaa

sourc es

Jukka Kortelainen: Suomivalimo Oy 1918 –1983 (1983)Juhani Aromäki: Just on Time – How a small family foundry

became the Santasalo -JOT Group (1998)Componenta annual reports 2000 – 2007

Heikki Lehtonen’s interview

COMPONENTA A Company with Nine Lives

Contents

1918 The Iron and MeTal Foundry SuoMI IS eSTablIShed

1920 sSTock MarkeTS craSh, Foundry ThrIveS

1939–1943ProducTS oF The Foundry are needed In war and Peace

1948–1963 develoPMenT oF own ProducTS

The 1970 s and 1980 snew ManageMenT, and bIg decISIonS

The late 1980 sSanTaSalo In The STock exchange, and The coMPany SPlITS In Two

1991–1993receSSIon In FInland, a whIrlwInd In The coMPany

1993–2003The new MIllennIuM arrIveS, and Today’S coMPonenTa IS born

2003–2008new dIrecTIonS – The neTherlandS and Turkey

COMPONENTAcomponenta.smartpage.fi/history/pdf/Componenta_History...4 componenta in 1921 the foundry...

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