Tikkurila has signed a Letter of Intent to buy a seven hectare industrial site near St. Petersburg, Russia. The aim is to start the construction work of a greenfield factory in 2018.

In order to support growth, Tkkurila is planning to invest in a new factory in Russia. The factory will be located in Greenstate Industrial Park, two kilometers south of St. Petersburg. The annual capacity of the factory will be 30 million liters with an expansion possibility in the future. The new site will also include a Research, Development and Innovation (RDI) center as well as extensive warehouse premises for raw materials and finished goods with railway connection, which will improve and enhance the efficiency of Tikkurila’s distribution facilities. The total investment amount will be around EUR 30-35 million depending on the final set-up. Design of the facility will start immediately and construction is scheduled to begin late next year. The production is set to commence in 2020.

The new factory will produce decorative and industrial products and it will replace the two existing solvent-borne production units in St. Petersburg. After the investment, Tikkurila will operate one water-borne and one solvent-borne factory in the St. Petersburg area. The investment will increase the Russian net capacity and there is also an option for further expansion.

“We are committed to developing our business operations in Russia, which is the second biggest market for Tikkurila after Sweden. We are the clear market leader in decorative paints in Russia and our aim is to strengthen our position further in all our customer segments. The new factory, warehouse and RDI premises improve our competitiveness, production capabilities and customer service,” says Erkki Järvinen, President and CEO of Tikkurila.

“Several location options for the new factory were studied. Greenstate Industrial Park in the Leningrad oblast was chosen due to its optimal location. We also want to hold on to the skilled people we currently employ in St. Petersburg,” says Petri Miettinen, Senior Vice President of Operations. “Deployment of the latest production technology will reduce lead-times and improve our environmental footprint. We want to promote high-quality products that are durable and safe for both users and the environment.”

Tikkurila has been in the Russian market for decades. Tikkurila started to export paints and coatings to the former Soviet Union since the 1970s. The first Western-style paint factory in Russia was opened by Tikkurila in St. Petersburg in 1995. Currently, Tikkurila has four production units in Russia; three in St. Petersburg and one in Staryi Oskol. Tikkurila’s logistics and retail network covers the whole country. Tikkurila operates two primary brands in Russia, Tikkurila and Teks.