Scan-Rent raises occupational safety to new levels
Scan-Rent raises occupational safety to new levels
09/11/2006
Finnish-owned Scan-Rent is doing profitable business leasing equipment to the construction market of Southeast Asia. Its hoists not only improve cost-effectiveness but also raise safety levels on building sites.
Scan-Rent Sdn Bhd is owned by Jari Silventoinen, a long-standing Finnish resident in 
Malaysia, and two local entrepreneurs. It began operating in 1997. Silventoinen recalls that the idea of setting up the company was born at a construction sector fair, where he got to know representatives of a Finnish building equipment manufacturer, Scaninter Nokia.
Initially Silventoinen’s company concentrated on equipment sales in Malaysia but, after the first fairly big deal, the market went quiet. Amid the economic crisis, the construction business in Southeast Asia slipped into a deep recession.
“The company’s first three years were difficult,” he admits. “Moreover we noticed that there’s more demand in these markets for leased equipment than equipment sales. 2001 saw a distinct upturn and now demand is extremely good.”
Hoists improve occupational safety
Most of the stock of equipment owned by Scan-Rent consists of hoists and working platforms produced by the Scaninter Nokia company, based near Tampere, Finland. They are designed in Finland and manufactured at the company’s plant in Poland.
“We’ve studied the market and proved in practice that this equipment is competitive in Southeast Asia.”
Silventoinen points out that the local construction sector is seeking extra efficiency from new technology. As a bonus, the contractor can also improve safety on building sites.
“Occupational safety here is in its infancy. Compared with traditional building scaffolding, modern hoists reduce the risk of accidents.”
Expanding operations
Leasing operations began with a few machines but the company now has more than 100 Scanclimber work platforms. This year it has expanded its operations in Malaysia. In addition to work platforms and small hoists, it intends to start leasing scissor lifts and boom lifts.
“The state of demand is excellent so we must expand. There is a lot of building activity in Malaysia.”
Apart from house building, Scan-Rent has customers in Southeast Asian oil and gas production.
“The volume is greater in the construction market but there are larger sums of money available in the energy industry,” Silventoinen notes.
Sizing up a wider area
He predicts that Scan-Rent’s turnover from leasing operations will be nearly a million euros this year. The company is also interested in expanding elsewhere in Southeast Asia.
“The whole of ASEAN is interesting because construction is enjoying a continuing boom. We began operations in Singapore this year and we’re also surveying the opportunities that Brunei, Indonesia, the Philippines or Thailand could offer us. An expansion into India is possible, too.”
As President of the Malaysia Finland Business Council, Silventoinen encourages Finnish companies to investigate possible export and investment targets in Southeast Asia. He’s a little concerned that China has distracted them from the opportunities available in other Asian countries.
Local economies have grown strongly in recent years, he points out. The prospects for the years ahead are also stable and there are no serious threats on the horizon.
“In terms of their business culture and size, markets in Southeast Asia are often easier for Finnish companies than, for example, China. The Chinese market may appeal to large companies but smaller ones can face difficulties getting started there.”
Finnfund helps finance expansion
Finnfund is participating in the expansion of Scan-Rent’s business with an investment loan. Silventoinen says that Finnfund’s contribution is significant because it is not always easy in Southeast Asia to find flexible, long-term finance.
“Obtaining local financing is relatively difficult here. In the wake of the slump, the construction industry is still not very highly valued.
Finnfund’s long-term financing will provide a solid basis for the company’s growth, he says.
“We’ve now purchased fifteen new machines. In the years ahead we will be able to take a long-term approach to developing our operations.”
For further information at Finnfund please contact Mr Pekka Juusela, Senior Investment Manager, tel.+358 9 3484 3342 or by email pekka.juusela(at)finnfund.fi
