Operating environment                         

PAVING

INFRA PROJECTS

BUILDING CONSTRUCTION

 

Growth drivers

 
  • The public sector’s investments in road maintenance
  • Low oil price
  • Poor condition of the road network
  • Population growth
  • Major road projects
  • Urban growth centre development
  • Several years’ investment gap and major road projects in Russia
  • The public sector’s and industry’s investments in infrastructure
  • Urbanisation
  • Population growth especially in cities
  • Climate change
  • Weak infrastructure in the Baltic countries and Russia
  • Urbanisation
  • Population growth in cities
  • Ageing of population
  • Apartment as part of investment assets
  • Building stock’s need for repair
  • In Russia, constant need for apartments and high dwelling density, the number of industrial projects has decreased
 

 Outlook for the near future

 
  • In Finland, the weak economic situation of the public sector affects road maintenance negatively
  • In Finland, governmental policy to make up  for maintenance backlog
  • In Sweden and Norway, demand will probably remain at the current level
  • In Denmark, growth is restricted by a decrease in public investments
  • Stable market situation in the Baltic countries
  • In Russia, funding depends on economic development. Allocation decisions are political.
  • Fewer new major infrastructure projects about to start in Finland
  • New and replacement investments in energy production increase demand in all Nordic countries
  • In Sweden and Norway, several major projects are underway and being planned
  • In the Baltic countries, infrastructure construction is supported by EU funding
  • Commercial construction is supported by major projects and public construction
  • Renovation continues to be brisk
  • Demand for housing still focuses on urban growth centres
  • Sales to investors supports residential construction
  • In Russia, the outlook is very uncertain and the direction of growth is difficult to forecast

 Competitive field and the most significant competitors

  • Lemminkäinen holds a strong position in the Nordic and Baltic countries; it is one of the largest paving companies
  • In Russia, we operate in the paving business mainly as a subcontractor and specialised work contractor
  • The most significant competitors: NCC, Skanska, Veidekke, Peab, Colas; in Russia: major Russian players, such as Autobahn and VAD
  •  In Finland, Lemminkäinen is the market leader in the industry in terms of net sales
  • Of different forms of contract, new cooperative models are increasing
  • In Scandinavia, competition is increased by Central European competitors
  • The most significant competitors: NCC, Skanska, Veidekke, Peab, YIT, SRV and Destia
  • In Finland, Lemminkäinen is among the five largest builders when measured in net sales
  • When it comes to small and medium-sized contracts, there are many minor competitors and the industry entry threshold is low
  • In Russia, many competitors in contracting.
  • The most significant competitors: YIT, SRV, NCC, Skanska; in Russia also LSR and Settle Group, in contracting local and smaller foreign players

Market development in the near future

 

Finland

Sweden

Norway

Denmark

Baltic Countries

Russia*

Paving

Infra projects

Residential construction

Other building construction

*includes high political and economic risk

Black arrow = Lemminkäinen operates in this market
Grey arrow = Lemminkäinen doesn't operate in this market
Source: Euroconstruct, company's own estimate