Roundtable discussion on Finnish Knowhow in Marine and Energy, South Korea, Seoul

Distinguished guests, Ladies and Gentlemen

It is a great pleasure and privilege for me to open this roundtable with a theme ”Finnish Knowhow in Marine and Energy”. The timing is excellent: this year we are celebrating the 40th Anniversary of our diplomatic relations. I am convinced that our visit and this event offer a fruitful platform to enhance the existing ties between our two business communities and increase mutual awareness of opportunities for new co-operation.

In many international comparisons, Finland has been ranked among the most successful nations in the world. In particular, we are envied for our achievements in R&D, our educational results, our use of information and communication technology and our knowledge management. We have been able to create business activities that have gradually gathered strength and achieved substantial market positions. But there are some dark clouds above Finnish economy such as declining exports and severe structural change in business sector. These threats make it necessary for us to immerse ourselves in the development of the research and innovation system even more actively than before. For example, Finnish national innovation strategy highlights the importance of growth companies and demand and user-driven innovation in innovation policy, and it is also necessary to ensure sufficient and up-to-date research resources and strengthen the internationalisation of the RDI system.

We know South Korea as a progressive and rapidly growing economy. Korea is one of the best performing economies of Asia due to its export-oriented economic strategy, diversified economic structure, robust domestic demand and progress in structural reforms. In the rapidly developing global economy, Korea has already found its place as one of the key Asian players. Last year Korea achieved 9th position in global trade. At the moment there are plenty of global challenges in economic field. However, we are looking forward to the results of ”Creative Economy” policy of the Korean Government.

The economic relations between Korean and Finland are traditionally good and increasing. Our bilateral trade is developing positively and economies getting more and more intertwined. Today South Korea is one of the most important trading partners of Finland in Asia. However, I believe there is still a lot of potential to widen our co-operation, in which the EU-Korea Free Trade Agreement also has role by creating business opportunities through trade liberalisation. The free trade agreement helps in strengthening our economic and business relations further. The potential is certainly strong in several fields and specific sectors, such as high technology, marine and offshore technologies, energy, green growth, clean technologies, ICT, infrastructure and recreational construction, health care and wellbeing, education, biotechnology and new materials just to name a few.

Korea and Finland are countries that share a strong commitment to environmentally sustainable green growth. Therefore, enhancing co-operation on innovations and clean technologies can create mutually beneficial business opportunities. There is also a long history in Korea as well as in Finland in shipbuilding making marine industry a natural area for co-operation between our countries. We are happy to note that after some years of low demand, Korean shipbuilding sector has recorded a remarkable annual rise in exports, with stronger sales of high-value vessels such as those used to transport liquefied natural gas (LNG).

Marine industry is one of the most internationalised and global business branches in the Finnish economy. Especially the shipbuilding industry has a strong and wide supplier network in Finland. The Finnish marine industry bounds together also strong network of middle and small size companies that increasingly extend their business internationally.

Finnish marine industry involves many global brands, products, and companies setting the course of world markets. Finnish marine industry grounds on strong tradition on shipbuilding and production of marine engines, propulsion systems, specialised integrated solutions, port cranes and on-board ship. These products and services are provided by a group of core companies, global players in their segments. Also our ship design and engineering companies as well as ship energy efficiency related companies are world class in their segments of marine industry.

For the past years the major client for Finnish shipbuilding has been the leisure market of shipping that is cruise and passenger vessels. In fact, 7 out 10 largest cruise ships in the world are built in Finland – including number 1 and 2. These ships have always been state of the art of shipbuilding with the most innovative solutions in energy efficiency, passenger convenience, hull design, etc. The building of these ships has been carried out by bringing together project management, engineering, ICT, ship operating systems, materials and components supply, ship power and propulsion, cabin modules, outfitting, repairs and retrofits.

In the beginning of this year Finnish shipbuilding took once again a step ahead in greening of shipping, as Viking Grace the most environmentally friendly large passenger ship and the first ever LNG powered passenger ship of its size was delivered to Finnish shipping company. The 56,000 GT (gross tonnage) vessel is powered by LNG and it generates no marine emissions and very few air emissions. The vessel has been designed to operate in the delicate and environmentally sensitive waters of the Baltic Sea where she will operate between Turku and Stockholm. She is also ice class of 1 A Super which means she is able to survive in the most harsh ice conditions in the Baltic Sea.

One of the burning issues in the world today is the Arctic and the opportunities it offers – especially the natural resources there and the Northern Sea Route. Actually the first one to sail through the Northern Sea Route was a Finn, renowned explorer and scientist, A.E. Nordenskiöld who made the trip in 1878.

So, the Finnish arctic expertise has long traditions and enjoys a good reputation. It is based on close familiarity with Arctic conditions and the efficient application of this knowledge. Perhaps the best example is provided by Arctic marine technology and related business operations, solutions, and services. This has been strengthened by the fact that Finland is the only country in the world whose sea around the ports can be frozen during the winter which has made us to develop our ice-knowhow. This has lead to another fact which is that Finland has built more than sixty percent (60 %) of all icebreakers in the world. The newest ice breaker of Finland will be delivered by 2016 and it will be equipped with LNG dual fuel engine and oil-spill response equipment. Finland will not forget environmental friendliness during harsh winter either.

The offshore market and its constant expansion have also been offering a lot of opportunities for Finnish shipbuilding and for the whole marine industry as well. Here the keyword is also Arctic. Offshore activities demand special vessels (supply and icebreakers) which are Finnish expertise. These special arctic offshore vessels have recently been delivered from Finnish shipyard to Russian shipping companies – and there will be more of these.

Besides the arctic technology and special vessels, Finnish offshore-related offerings include ports and terminals, ship on-board cargo solutions, spar hulls, advanced offshore structures, technical solutions and horizontally in systems and solutions needed for energy efficiency and environmentally friendly maritime operations.

I will change into the other topic of today, the Finnish energy knowhow. I have to mention that when this May I hosted an event in Helsinki, where the International Energy Agency IEA published their Country Review of Finland, in her remarks, the IEA Executive Director Maria van der Hoeven praised Finland’s energy policy by saying that “Finland stands out as a particularly impressive case.”

Renewable energy plays an important role in Finland’s energy policy. Currently some 33 % of Finland’s final energy consumption comes from sources of renewable energy, and the EU requires Finland to increase the share to 38 % by 2020. This is one of the highest figures in the EU. Forest based biomass has a central role in Finland’s energy economy, and around 80 % of our renewable energy is based on it. The use of forest based biomass in Finland is sustainable, as a majority of it is by-products from forest industry.

Another key aspect is nuclear power, whose share is around 26 % of Finland’s electricity supply. There is also one nuclear power plant unit under construction, and two more have been granted decisions-in-principle. Together these three units would increase the share of nuclear power to almost 60 % of electricity supply.

Above-mentioned achievements could not have been achieved without the state-of-the art expertise of Finnish companies.

As is the case in South Korea, also the Finnish winter is cold and there is need for space heating. Both South Korea and Finland recognise the benefits of District Heating and Cooling as well as Combined Heat and Power (CHP). Furthermore, both countries are among the most advanced countries in the world in these areas.

Finland has a strong expertise in energy technologies, both for sustainable energy production and energy efficiency. Finland is an exporter of energy efficiency technologies such as energy efficient generators. The Finnish companies have an especially strong knowhow in variable-frequency drives, which could save energy and give huge cost-efficiency gains to the industry in South Korea.

Finland is one of the global leaders in efficient waste-to-energy and bioenergy solutions. Waste gasification expertise makes it possible to maximize energy yield and increase the energy value of the municipal and industrial waste. Gasification technology has already been demonstrated in large scale in Kymijärvi 2 power plant, which was provided by the large Finnish technology supplier Metso. Kymijärvi 2 is one of the first gasification power plants in the world to efficiently generate electricity and district heat from recycled fuels.

Finland has a strong wind power cluster. It mainly concentrates on the wind turbine components and has a turnover of approximately 1 billion Euros. Finland is also an exporter of modern oil and gas power plants and their burners, which are planned to use both fossil and bio-oils and gases to make the flexible move to renewable fuels possible.

A good example of the co-operation between Finland and South Korea is the Samcheok Green Power Project in northeast of South Korea which belongs to the Korean Southern Power (KOSPO). In its first phase, the plant will feature four 550 MW ultra-supercritical CFB boilers (Circulating Fluidized-Bed) from the Finnish technology provider Foster Wheeler. The plant will be one of the most efficient power plants of its kind in the world.

In addition to these areas of shared interest, the service sector is as well an integrated part of our business relations and a source of future growth. Services play an increasingly important role in a modern society’s economy and are increasingly more important source for growth and employment.

All these sectors that I have mentioned are also present here today. A business delegation has travelled with me to Korea. Our delegation includes among others global leaders in complete lifecycle power solutions for the marine and energy markets, full service ice technology, efficiency of cargo flows on land and at sea, experienced builder of technologically demanding projects and it is known for innovative and ecologically friendly solutions. In Finland we do have many companies with world class technology, especially in relation to the arctic environment. By combining the know-how in both countries one could achieve substantial results. Many companies here today are already present in Korea and interested in increasing their investments and business in the Korean market.

Ladies and Gentlemen,

Today is a historical day in the business relations between our countries: I am looking forward to the launching ceremony of Korea Finland Chamber of Commerce. This reflects well the development of business ties between our countries. I am sure that the new Chamber will do its part in lifting Finnish-Korean economic co-operation to ever-higher levels. I hope that you all will take advantage of this opportunity and share your creative ideas.

I would like to thank you all, especially Finpro and the Team Finland in Korea, for this roundtable and wish you all success in developing the co-operation between Korea and Finland.