Finnish firms target Norway but face tough negotiations

More Finnish companies are seeking business in Norway, but they should expect tough negotiations and need local contacts, Yle reports. Savonlinna-based Norelco, which makes electrical cabinets, transformer substations and switchgear, plans to start selling in Norway next year.

The company hopes to sell to Norway’s electricity grid operator Statnett, which has said it will invest billions of euros in improving the grid by 2035. Norelco chief executive Ari Hämäläinen says the company wants to become the Nordic region’s preferred partner for electricity distribution systems.

Finnish companies have established more than 400 subsidiaries across the Nordic countries in the 2020s. Sweden remains their most important export market, but interest in Norway and Denmark has grown. According to Statistics Norway, Finnish companies’ investments in Norway have nearly tripled in a decade, reaching 9.7 billion euros in 2024. Finnish goods exports to Norway have risen by almost 60 per cent over the same period.

Laura Piitulainen, a senior adviser at the Finnish embassy in Oslo, says interest in Norway increased after Russia’s full-scale invasion of Ukraine in 2022, when Finnish companies began looking for new markets. Finnish firms in defence, energy and maritime industries have done well there, she says.

Norway’s direct business culture resembles Finland’s, Piitulainen says, with few rigid hierarchies and decisions often made quickly. But Norwegian companies tend to favour domestic partners and work with foreign suppliers when their products improve operations or provide solutions that are not available in Norway.

“Many people imagine that Norway is so wealthy that money can be spent freely. But Norwegians are very tough negotiators,” Piitulainen says.

Consultant Gunnar Puhakka, who has represented Finnish companies in Sweden for 20 years and now also works in Norway, says business depends entirely on local networks. Without contacts, companies face a difficult path, he says. Puhakka lives in Kuopio and travels to Sweden, his former home country, every other week.

Norelco first tried to expand into Sweden, the Nordic region’s largest market, but Hämäläinen says the effort failed because the company was represented by a Finnish salesperson. The company has now hired a business development director in Norway who previously led an electricity company and served as a member of parliament. The new hire is expected to use their network to raise Norelco’s profile.

Labour shortages had long held back Norelco’s expansion. The company has since hired and trained dozens of Filipino employees. Its annual turnover has been just under 40 million euros in recent years, and it aims to reach 100 million. Norelco plans to sell products worth a few million euros in Norway next year and eventually wants international sales to account for 30 to 40 per cent of turnover.

Hämäläinen says the company cannot grow to its target size in Finland alone, despite its work on several data centre projects. Norelco’s main competitors are other Nordic groups, and he says the electricity sector is consolidating as Swedish and Norwegian companies acquire small and medium-sized Finnish businesses.