Interview with Teemu Korhonen, owner and managing partner of Co. VALASAHA1/History of the company (product/service) and its milestones briefly.
TK:
- Valasaha was founded in the beginning of 2021. From the day 1, we were focused on building up a wood trading company, specialized on Back-to-back wood products trading.
- Milestones have been seen as years in business:
- Rapid volume growth in 2021 with Softwood and Beech Round logs to China and to Korea
- 2022: Expanding the Hardwood business to Asia and building up business with further processed products like lumber and panels.
- 2023 Restructuring the company ownership, cutting 40% of the fix costing and work the company loose from the not profitable and highly volatile commodity-log businesses (Spruce and Beech).
- 2024: Getting the company back on profitability track with sensitive cost strategy and cementing the 3 product segments (logs, lumber, panels)
- Also creating diversified portfolio based on customers and markets around the world, with careful market screening, activating local partners and specialized sales strategies.
2/When, why and with what product/service you started to consider expanding into foreign markets, in which territories and what opportunities/challenges this brought you.
TK:
- From the very beginning we have been determined and passionate to be specialized in Export-Trading. This is our Company DNA
- Obviously also based on my (as an owner of the company) professional business background. à “This is what we are good at, and this is what we like to do.” In am also a believer of the sentence: “If you do not love what you’re doing, you’re screwed…”
- As a target markets, we have always selected the ones we know to be growing and having stable demand. (F.Ex. Certain Asian countries and Middle East).
- Additionally, we need to have reliable local sales staff or partners locally.
- Most challenges are based on political and macro economical volatility. These can be seen as threats as well as opportunities.
3/ What are the difficulties of the territories concerned?
TK: Political instability, short term thinking, corruption, volatility
4/ What proportion of your total sales is made up of export activities (has it increased in last years)? Do you have a different business strategy in domestic and international markets?
TK: 100%. We only work in international markets.
5/ Which products/services are the most successful in your export portfolio and why do you think they are competitive?
TK: We are working with wood products, from raw material (round log) to the finished products (flooring and decking)
- The success of the product is always linked to each market.
- With Raw materials, we do see the biggest growth still in Asia
- Semi-Finished materials are mainly growing in MENA
- Finished products have demand in European countries.
- We are competitive because we have great support from our local partners and we add the value to the business, our customers need.
- Correct product at the par pricing. à Customers receive the optimum yield for their production.
6/ What are the most common challenges you face when exporting (regulation, logistics, cultural differences, etc.)?
TK: Delays on shipments (Ships), Document delays, etc. Cultural differences do not really apply to our business, as we only do business in the areas and cultures, where we understand the framework 100%…. (Like Warren Buffet said: „Only invest in business you understand “) à We only invest in markets we understand.
7/ How do you evaluate your competitors in international markets and what is your company advantage there/how you differentiate yourself from your competitors?
TK:
- Our business is worldwide spread, but we believe to know most of our competitors.
- Most of our competitors are specialize only in one of our segments. Additionally, they normally cover smaller areas, in terms of sales and/or sourcing.
- Our competitive edge is based on diversification of our products, understanding of the whole value adding chain, 100% Transparency and trustworthy relationships with our partners. Additionally, we can also offer additional value with payment terms, logistic services and even DDP deliveries, as we even take over the customs clearance and local trucking.
8/ How have your export activities changed in last years, especially considering economic and geopolitical challenges?
TK:
- High speed economic growth, lack of supply and Covid “flooded” our business with thousands of “trial-and-error traders“, and overheated market also opened the door for several dishonest behaviours à The risk of fraud and the mentality of „risk and reward” led to a market framework where you must act very carefully and cautiously. As Valasaha, we need to know all our customers personally and we screen our partners (both suppliers and customers, very carefully) before entering a business with them.
- Additionally, we need to follow the insider information’s carefully to be ahead of the news, in terms of Geopolitical changes. If we react according to the geopolitical newsfeed, we are already 6 months too late….
9/ Which countries/territories do you consider promising and what attracts you to these markets?
TK: Southeast Asia and North Africa will most probably be growing fast, during next years.
10/ How do you manage the risks associated with exporting (political, commercial)?
TK: As explained earlier.
11/ Do you have any partnership/collaborations with locals in foreign markets?
TK: We have our own local subsidiaries in Serbia and South-Africa. Additionally, we have Joint-Venture Partner in Kuwait and Saudi. We are going to take next steps in Southeast Asia with a local Partner.
12/ Do you take advantage of any government support programs for exporters?
TK: No.
13/ What is the long-term vision for your company in global markets (horizon up to 10 years)?
TK: To be one of the major trading houses for wood products, worldwide.
14/ Tell me about an interesting situation from your export history (e.g. cultural differences in trade, etc.)
TK:
- There are for sure several interesting and partly also funny situations occurred during our trading activities, based on cultural differences, though one of the rememberable situations was for sure when I was able to convince local architect and customer to accept completely another wood specie for their cladding construction, even though they specifically banned the usage of this specie. Until today they are not aware of the fact that they used the specie, but they are still 100% happy customers.
- At the end of the day, it just came to the personal contact and face to face business, as always. As my company senior advisor in Germany is saying: People make the markets….
15/ What impact does the region (Slovakia) in which you do business (national context) have on your company’s operations?
TK: Slovakia is our main country for sourcing and HQ of our operative business. We are at Home in Slovakia. We are also planning on significant growth with Slovakian products and -Industry.
16/ What makes for a good leader?
TK:
- My motto is: Trust and respect are far greater than fame and popularity.
- Best leader attracts the best people and let these people GROW in trusted and respected surrounding.
- Leader always needs to be able to reflect and identify our weaknesses and work on those.
- Additionally: Accountability, Responsibility and Empathy.
17/ What would you recommend to Slovak entrepreneurs who are just about to expand abroad?
TK:
- You need to spend time to know your new market and your business.
- If you want to explore new market, you need to dive to the deep end. Trade shows and local chamber of commerce can show you a nice power point presentation and they can prepare you for the travel, but you need to do the travel yourself.
- Probably most important: Find the most reliable local person available to support and help you. And when it comes to the local employees: professional experience or expertise is by far not so important as the honesty, loyalty and willingness to learn.
- And finally: You need to be able to explain in one A4 to all your stakeholders: why your company will be successful in that certain market.
Thank you for the interview.