On the way to the new markets
The Most Competitive Small and Medium-sized Enterprise 2009
RIVERSIDE OÜ 2008:
Sales (th EEK) 131,003
Riverside started from the countryside, Pala from Jõgeva area, the place where one of the managers of the construction company Jüri Põld originates from. At the better times 60-70 people were employed in the company, today the market situation is slightly more complicated and the fact has become clear that there is no sense to do everything with own forces. One fact among others is interesting: how often have you heard of the company that takes time to train its employees, knowing that therefore the sales decreases anyway? Such decision was though made in Riverside in 2007. In a year’s time the construction market collapsed, today in 2009 the situation is even more complicated. The same construction company works and stays at the market quite successfully regardless of everything.
We meet Jüri Põld, the manager of the company one morning when he has quite little time. After the interview he rushes to the airport with the car to fly fast to Ukraine. Also several other construction companies look into this country and many others do not dare to enter the Ukrainian market. But at the beginning we start from the reasons of establishing the company.
All started from the fact that there was no serious construction company in Pala rural municipality which would fulfil the major orders. “As at that moment the money of the state and the European Union was directed thereto, the thought came from there. This is actually the outskirts and Pala area was like in the role of orphan for a long time. We had the idea to operate in this area quietly and provide the competitive construction service to the local people. Then, for the best or for the worst, the slightly larger organisations incurred the competition with which was already difficult and then we started to look for the way to Tallinn. Finally we moved to Tallinn and here really everything grows and develops constantly,” Põld explains the background.
Põld is the man who, if needed, also takes the trowel into hand, piles up the wall and carries the heavy blocks at the construction site. In any case – one thing is clear that the managers of the company are not afraid of the work or major challenges: slightly after when it clarified that the construction market in Estonia falls, the company decided to expand to Ukraine. “Currently I do not deal directly with management in Estonia, as the expansion to the Ukrainian market is quite labour intensive. The representation has been established there and the first works are under process. In July this year we started with works there. The objects to be built there are currently still a secret – when completed, we talk about it,” Põld says modestly.
The choice was made for the benefit of Ukraine due to the fact that this country has not yet reached so high in its development than the vicinity of Russia and its major cities. Riverside has understood that the construction boom in Ukraine just started and there are relatively few companies with good structure and experience. Ukraine has surely major companies, but these are not so flexible.
As no construction orders come from the private sector, Riverside keeps itself in process such as many other Estonian construction companies with the public procurements at the local market. They participate actively where possible and the statistics indicates that in average of 10% of the tenders are won. Põld tells that the market is adjusting - small Estonia has very many construction companies established during the boom which have no work and now these companies with 2-6 men disappear with high probability. “Our problem is that when there were good times, then every employee having been a specialist for a couple of years, decided to establish own company and thus very many valued and good people were lost and several nothing-telling companies were received without correct administration and management of the company. The Estonian is also very tough, even if it can be seen that the situation is bad and there is no sense in continuation, he still continues. We have lost the tenders to relatively unknown companies and if their annual report is reviewed there is nothing, a long column of tax debts can be seen and just the moment before making the tender everything will be arranged. I do not know how they are able to fulfil the order and the quality is questionable,” Põld thinks. There is one more thing that disturbs the company’s manager. Namely that the documentation of the procurements has been poorly prepared. “I do not know whether people could not deal with this documentation or why is this like that, but the requirements are thus absurd.“
The year 2006 was an excellent year for the company and then the problem of training the personnel arose. Thus it was decided not to expand in 2007, but to contribute to one’s employees, this in its turn naturally decreased the sales and results. In 2008 Riverside had the next year of rise, but as Põld says – maybe at the wrong time, as the market started to fall. Anyway, several big and small projects were completed in 2008.
“The office tower, i.e. Audi house was built in 2008 by the centre of Rocca al Mare – this was our major contract last year which also reached the year 2009, as my aim was the expansion towards Ukraine. One object should be immediately completed in Konguta – renovation of one kindergarten and school, one shed-drier is in progress which is under heritage protection and therefore the construction works require high skills. One object is also in Võru City Government which will be completed in March 2010 and many small objects are also in Tallinn,” Põld views the long list of works.
To sum up Põld says that the men will always remain children. When in the childhood the children play with small blocks, then now the blocks are slightly bigger. “Construction is actually very interesting, you build something and this will remain for the tens of years. It feels extraordinarily good when something especially interesting could be set up!“
The company was established in 2003 and is based on the Estonian capital. Last year 25 persons worked in the company. In addition to regular general construction works also the services of construction management and design are provided to its clients. Among other things, it is also interesting that the permit for the conservation and restoration of architectural monuments has been issued by the Heritage Protection Board to the company. Also, Riverside carries out the research works through different architectural monuments.