Management of personnel
The entrepreneurs stay away from risks as much as possible. For instance by installing a 1,000 kWh backup generator. It runs more than expected. Not because the power goes off completely, but to compensate for alternating voltages. Another risk, management of personnel, for the experienced entrepreneurs this is not a problem. Teppo always worked with two assistants, Korkiamäki had a leadership role in the field at Delaval. "Leadership is not new to us. Treat others as you want to be treated, but remember to also lead them. They have freedom in their work, but should do the job the way you want it done."
The division of tasks between the two executives has grown rapidly and is responding to both interests. Korkiamäki does general management, Teppo focuses on nutrition. "He applies the rations on the basis of intake, milk production, and the colour of the manure." The two can take each other's role during holidays. "I was skiing a few weeks ago with my wife and kids," says Korkiamäki. "It was the first holiday in ten years that my mobile hasn't rung for the business."
Healthy financing buffer
The investment was, apart from the animals, €5 million. Of that, €1 million was subsidised and €1.2 million came from own resources. That brought the necessary additional funding to €2.8 million. At the current low interest rates, less than 2.5%, and repayment in 20 years that means financing costs of 3 to 4 cents per kilo of milk, if the company is in full production. "Our long term milk price is 40 cents," says the Finn. "We have counted with a much lower price, 35 cents per kilogram. At this time we receive below that because exports of milk to Russia, Finland's main customer, has stalled. This will not lead to problems. Our maximum risk is determined at a milk price of 30 cents for a year. On that basis buffers were formed. And when the price goes up again? Then we accelerate repayments to the bank and pay the shareholders a dividend so we get our own resources back."