Looking at our three power distribution markets, Finland, Sweden and Norway, 2017 was a great year for VEO. Being very different from each other, all three markets outperformed our expectations with strong growth.
In Finland, VEO’s business got off to a great start already in the beginning of the year. The investment rate in Finland continues to be high, both in substation and in medium-voltage projects. The Finnish transmission system operator Fingrid heavily invests in the national grid’s capacity and reliability. As the feed-in-tariff for wind power was terminated at the end of the year 2016, investments in wind power are at a standstill. The Finnish market is also experiencing increased competition from new actors. As we are one of the larger actors in Finland, our challenge is to actively keep our significant market share. We do, however, also see that we have growth potential within the larger EPC projects, for which we work hard to develop our operations. In general, our projects have grown in scope in the Finnish market and they often come as package deals with several projects under one contract.
In Sweden we see an enormous drive for investments, with distribution companies seeking new suppliers to keep pace with their investment plans. For this, VEO’s modular substation concept, first launched in Finland, has proved to be a success. Its prefabricated design significantly saves time in project execution. In comparison to other foreign companies aiming to gain a foothold on the Swedish market, VEO has the advantage of having project managers, lead engineers and support functions, who fully operate in the Swedish language. From our long experience in the Swedish market, we also know the Swedish standards and technical demands. With the large number of projects in Sweden, we have been lucky to be able to concentrate on projects where we can offer most value to our customers. Our strategy has landed us important deals with the three giants in power distribution: Ellevio, Vattenfall and E.ON. The main challenges we see for our growth in Sweden is the shortage of skilled energy professionals and finding suitable subcontractors for civil engineering and installation work. In terms of local subcontractors, we have also had to train ourselves in understanding their way of working.
For the Norwegian market, in turn, 2017 was interesting in many ways. The year started slowly for us but ended up being record-breaking by the end of the year, with successes particularly in the wind power market. Our new wind farm project Bjerkreim is one of the largest single distribution contracts VEO has ever signed. With our long experience, VEO has excellent references for the wind power segment. We see that wind power will continue to grow and boom in Norway at least during 2018. Wind projects are, however, in many ways unpredictable, with electricity certificate prices steering investments. To stabilise our business in Norway we also need continuous orders on other power distribution projects. Just as in Finland with Fingrid, VEO is hoping to take on larger projects with the Norwegian transmission system operator Statnett. For this, VEO needs more local resources and a deeper understanding of the local regulations and practices.
We have managed to develop our way of working in every sense, providing our customers with cost-effective and technically tailored solutions.
Looking at last year as a whole, we did very well in our distribution business. We have managed to develop our way of working in every sense, providing our customers with cost-effective and technically tailored solutions. This has borne fruit and by turn of the year 2016/2017, we had approximately 50 delivered and ongoing projects. The majority of these projects are turnkey deliveries, where we take full responsibility for the project, from the beginning to the end. These EPC deliveries are more challenging from a risk management point of view, but we have learned to mitigate there risks, and that has gained us larger projects than what we have had before. We are certain that we can grow significantly in EPC deliveries and have much value to give. This business requires that we keep on developing our processes and learn to be even smarter in our actions. We need to focus on our customers and continuously develop our main core competences and key resources.
Naturally, success and many projects in the pipeline means a great deal of work for everyone. It has been good to see that, despite the workload, our people are committed and in good sprits. That is true on every level, from sales to engineering and project management. To balance this growth, we have made many successful recruitments. We are also satisfied and proud that we did not have any serious injuries last year, despite the inherent dangers of our industry and the amount of people we have at sites at any given time. Health and safety demands have been tightened and VEO has done a good job in keeping our workers safe. Important in securing a safe working environment is the right equipment, site processes and training, in which we now put extra effort on all of our three markets.