INNOROAD PARK AND JYVÄSKYLÄ Toni Pienonen Jyväskylä Regional Development Company Jykes Ltd. 29.9.2011
CONTENTS 1. Background: Jyväskylä and Jykes 2. The big picture: Jyväskylä on the logistics map 3. Putting it to practice: Innoroad Park 4. Future activities 5. Future trends and challenges 6. Learning points
1. BACKGROUND JYVÄSKYLÄ AND JYKES
Jyväskylä region City of Jyväskylä, municipalities of Laukaa, Muurame, Uurainen, Hankasalmi, Petäjävesi and Toivakka (174 000 residents) one of the fastest growing regions in Finland 45 000 students in the city two universities, several research centers Technology industry, ICT, bioenergy, nanotechnology
Jyväskylä Regional Development Company Jykes Ltd. - an expert organization owned by the municipalities of Jyväskylä region - offers expertise, support and various networks for companies - creates opportunities and conditions for profitable business operation - offices in Jyväskylä, St. Petersburg (Russia) and Shanghai (China) My role together with the Sales Manager of Jykes: - we sell the region as a business location for companies outside Central Finland and attract inward investment concrete actions, no analysis or reports - consulting and supporting the locating companies
2. THE BIG PICTURE JYVÄSKYLÄ ON THE LOGISTICS MAP
Jyväskylä is in the crossroads of major Finnish throughways: National road 4 National road 9 National road 13 National road 18 National road 23
1 Finnish national road 4 (E75): the main link between Helsinki and northern Finland, the backbone of the Finnish transport network 1,295 km, 200km is motorway All the northbound traffic from southern Finland uses road 4 For Jyväskylä-based export businessess it s the connection to the Vuosaari harbour in Helsinki National road 4 in Helsinki National road 4 in Lapland
Railway network: Jyväskylä is connected to rest of Finland via railway hubs in Tampere (south), Seinäjoki (west) and Pieksämäki (east) + there is a light-traffic freight line to north
All major Finnish population centers are reachable from Jyväskylä in a reasonable amount of time. A company from north or south can serve their customers in Western and Eastern Finland from office in Jyväskylä It s a matter of perspective anyway: Jyväskylä is in the corner away from Central Europe, but in the center of Finland and Scandinavia and Russia a market area of 80 million customers.
Research and education Jyväskylä has three institutions that actively work in the field of logistics: University of Jyväskylä, JAMK Univeristy of Applied Sciences and Jyväskylä Educational Consortium. They cover all aspects from educating professional drivers to university-level research University of Jyväskylä Two professorships on logistics optimization and simulation. Part of a project co-funded by public-private partnership aiming to reduce the logistics-related costs of Finnish industry (26,4 billion EUR) JAMK University of Applied Sciences Degree programmes in Logistics Engineering, bachelor and master s level programmes, which are ranked among the best on national level. Focus areas are: Logistics Management Logistics Support Logistics Operations, including transport, materials handling, warehousing and inventory management Jyväskylä Educational Consortium Finland s leading instructor in vehicle transportation
3. PUTTING IT TO PRATICE INNOROAD PARK
Situation of the road and vehicle industry in Finland employs 200 000-300 000 people new employees added 5000 each year (road transport) logistics cost 30 billion euros a year cost of traffic accidents 4,4 billion euros a year industry undergoing structural change, profitability and image are weak lack of innovation and business strategy acumen knowledge in organizations is dispersed, education and research is interdisciplinary In Jyväskylä, the building blocks are in place for becoming an excellent logistics platform in 2005, the city of Jyväskylä makes a strategic move to utilize it better Innoroad concept is created as a triple-helix expertise network, combining business, academia and public sector to respond to the challenges faced by the industry on national level the network develops innovations and expertise in the road transport and vehicle industry
Innoroad network provides the knowledge element and environment for the region, it cannot create a sufficient business impact alone results need to become more concrete Logistics companies need good infrastructure modern commercial space for office and warehouse functions professional workforce opportunities for networking Jyväskylä region had an extensive area of sparsely-built land in the border between Jyväskylä and Laukaa, readily zoned for such activities this makes cost-effective land use and construction possible urban structure and business environment in accordance with principles of sustainable development Thus, Innoroad Park is launched:
What is Innoroad Park? a real location, situated in the sparsely-built area between the city of Jyväskylä and municipality of Laukaa, next to excellent logistics connections a business park hosting the leading transport service companies as well as companies specialising in vehicle industry manufacturing, maintenance and trade a place where companies receive the support they need for developing their expertise and operations, combining the interdisciplinary Innoroad expertise network of local research and education institutions and businessess Goal: to create one of Europe s leading research and testing centers, serving especially the needs of the heavy transportation
Companies located in Innoroad Park receive: an innovative business environment a growing service network readily zoned plots and built commercial space functioning infrastructure Different target groups: transport and logistics maintenance and repair: after-sales services trade: businesses involved in vehicle and spare part trade production: businesses involved in subcontracting component and system manufacturers for transport and vehicle industry materials handling system providers for manufacturing industry and trade
Coordinated zoning and city planning between Jyväskylä and Laukaa, logistics-related activities are concentrated to Innoroad Park area guaranteeing a steady supply of suitable plots plots readily zoned for logistics and light industry Ongoing cooperation with construction companies
Example of cross-sectoral cooperation MegaHub Logistics Center Jyväskylä 15 000 m2 space for logistics operators and light industry, terminal space, cross docking, high-bay storage area MegaHub Development Ltd: manager and concept developer, specialized logistics solutions designed with keeping in mind sustainable development and customermodifiable space solutions Lemminkäinen Group: responsible for construction Jykes: participated in the preliminary concept design and its positioning within Innoroad Park
Quantitative objectives 2008 2020 2030 Companies 60 130 230 Total commercial space 54 300 m2 175 200 m2 485 850 m2 Land area use 60 ha 175 ha 300 ha Employees 668 2000 4000 In 2030, Innoroad Park will have Testing environment for busses, trucks, articulated vehicles, all-purpose vehicles, earthmoving vehicles, and emergency vehicles alike Different track for the purpose of training the control of special vehicles under extreme circumstances Intermodal freight terminal for combined transports A service center with relevant support functions (education and conference facilities, restaurants, etc)
Targeted sales and marketing activities for companies at trade fairs and exhibitions When Jykes started to actively sell the region in spring 2010, Innoroad Park was involved in the process results of the work were visible a year later 2005-2011: several key companies locate to Innoroad Park or expand their Jyväskyläbased functions (Scania, Transpoint, Taipale, Valio, Komatsu Forest, Kellfri, plus others) Clustering-related benefits: customers able to receive service in the same location, availability of educated workforce, proximity of terminal functions, etc. Increased predictability: by locating in Innoroad Park, companies know that future zoning and infrastructure decisions will support their goals
4. FUTURE ACTIVITIES
Starting in 2009, as the financial crisis turns into a global recession, the export-driven technology industry (machinery, power transmission solutions, etc.) in Jyväskylä begins to face challenges while export orders go down, logistics costs increase and competitiveness erodes away Company structure in the region is centered around global market leaders (e.g. Metso, Valtra, Moventas) and a wide array of small businessess, many of them subcontractors for the larger companies logistics operations are uncoordinated, each company does them separately orders per individual company are small in many cases, leading to high costs and unused space in containers lack of sophistication and optimization
A need for new shared logistics solution and wholesale operators or 4PL (fourth-party logistics) service providers to act as intermediaries Present Industry Need / future Finnish Railways Trade Shipping Companies Transportation companies Finnish Railways O P E R A T O R Trade & industry Transport Forwarders Shipping Forwarders
Kangas paper mill - industrial activity since 1730 - situated right next to the city center South-African Sappi Limited paper company closes the factory down in 2010
as a result, 150 people lose their jobs and a large 60 000 m2 industrial space becomes empty The city of Jyväskylä steps in, buys the land and the buildings Jykes Kiinteistöt, an affiliate of Jykes and likewise owned by the municipalities, takes responsibility of marketing and managing the area max. 5-year long leases are signed with companies, while the city plans for the future use of the area as an extention of the city center (housing + office)
The paper factory building from the 1970s: 30 000 m2 low-cost space for logistics operators and light industry railroad connection = intermodal freight transport possible
Excellent location
A plan is created by Jykes to make use of the newly-found opportunity in Kangas for creating a logistics solution to meet region s challenges Starting point: evaluating the possibilities of building a terminal and overall system for intermodal transport from and to Jyväskylä customer interviews: 50 companies in the region service provider interviews: 20 companies public actor interviews: 5 facilitating several meetings Result: Cargo Jyväskylä, a freight terminal for intermodal transport (trucks + train) functions Kangas to become a temporary freight terminal solution for the next 5 years
Cargo Jyväskylä Jyväskylä Kangas Tampere Wholesale operator sells cargo space to all Sea containers to north Connection Cargo Allegro St.Petersburg Wholesale operator buys whole train, 50 TEUs / containers Finnish Railways operates the train Container stuffing in Jyväskylä Dryport services Deep sea container depot Connections by road from north Bioenergy containers Container services to Northern Finland Helsinki Vuosaari
Jyväskylä Kangas STUFFING Machine industry Paper industry Wood industry SELLING CARGO SPACE Containers from terminal Containers from Northern Finland Bioenergy containers Trailers BlockTrain Jyväskylä-Vuosaari CONTAINER DEPOT Maintenance Storage Vuosaari harbor, Helsinki
Cargo Jyväskylä plan Daily connection from Jyväskylä/Kangas Helsinki/Vuosaari harbour Transportation time 12h Roundtrips per week: 5 Wholesale operator 50 TEUs per train (TEU = standard size container) Customer need from Jyväskylä to Vuosaari 15 000 TEU per year
Local industry is willing to centralize their logistic actions Kangas will serve as a freight terminal with daily deep sea container train connection to Vuosaari Paper and wood industry is willing to start container stuffing at Kangas Train connections to Russia It s green
Kangas is only a temporary solution City of Jyväskylä is ready to zone a location for an intermodal freight transport terminal in Innoroad Park, next to an existing railroad track
Vision 2020: the intermodal freight terminal integrates the services of Innoroad Park to the international logistics networks and value chains of entire Finland
Intermodal freight transport terminal (Preliminary plan used in the zoning) Functions and location within the terminal area 1. Rail connection Jyväskylä-Suolahti (north) - not electrified - access control 2. Processing rail tracks: 2 x 750 m for loading and unloading - 1-2 full-sized trains per day 3. Deposit for large-sized containers - area flexible according to the utilization rate - bioenergy units 4. Data management, office and control - real-time material and warehouse control - access monitoring 5. Traffic flow - 200 300 trucks per day 6. Container freight station - loading the bulk material to the deposit Handling devices: container reach stackers, forklift trucks, automated functions
5. FUTURE TRENDS AND CHALLENGES
Future trends The development of logistics systems for local businesses continues with ever-increasing importance, intermodal transport will be a vital part of the transformation The major global businesses in the region develop logistics capabilities and supply chains within their own organizations or networks Traffic flows will increase Bioenergy and related transport functions are expected to play a major role in the future Central Finland is Europe s leading bioenergy cluster, where more than half of the energy needs are met with local forest-based fuel sources Business opportunities are opening within Finland and internationally
Future trends (continued) In the fututure, region and its businessess need fourth-party logistics (4PL) service providers contract logistics operators for logistics outsourcing and the management of complex international supply chains integrated services for planning, control and execution more sophistication
Challenges can the infrastructure and road network keep up with the increasing traffic flows in Innoroad Park? can the municipalities zone and supply enough suitable plots for businessess? how to better coordinate development between businesses, construction companies and two municipalities? a challenge for all of Finland; rail network in Finland dates back to post-war period - doesn t reflect the current situation do we find new ways to be more efficient in logistics and invest, or do we take the easy way out and simply cut the costs?
6. LEARNING POINTS
It s all connected: see the big picture, connect the dots. Seize the moment when the crisis happens, but act according to the long-term plan. Reinvent yourself. You need to build concrete solutions, not just create buddy-buddy networks or tell where the problem lies. Marketing and sales perspective it s not a plot of undeveloped land between Jyväskylä and Laukaa, but Innoroad Park, a branded and productized business park with neccessary support functions. Be active; selling and marketing a region is like selling any other product or service. Passive actions are not sufficient, you need to be proactive and meet prospective customers in person. Reality is elsewhere.
Jyväskylä region is fortunate to have plenty of the most valuable resource in the world - human capital and fresh ideas. We combine technology and user perspective. Jyväskylä continues to reinvent itself when challenges arise. This is our most important advantage.
Thank you! For any questions, please contact toni.pienonen@jykes.fi