Honkarakenne’s 50th anniversary this year

The world’s leading manufacturer of log houses, Honkarakenne Oy, is celebrating its 50th anniversary this year. The firm founded in Lieksa, eastern Finland, by the Saarelainen brothers in 1958 has, over the years, grown into an international company that focuses strongly on the export market. Over 60 per cent of Honkarakenne’s turnover comes from exports.

During the past 50 years, over 70,000 Honka log homes have been sold in more than 40 countries. Besides Japan, significant export destinations since the 1970s have been the countries of central Europe, the most important being Germany and France. In recent years, Russia and the neighbouring regions have topped the list of export destinations. Honkarakenne has subsidiaries in Japan, France and Germany.

The B shares of Honkarakenne, which is still run as a family company, have been quoted on the Helsinki Stock Exchange since 1987. The A shares are owned by the Saarelainen family, whose members Mauri, Eero and Kari sit on the Board of Directors. The company’s CEO since 2005 has been Eero Teerikorpi.

Pioneer in industrial log construction

Viljo, Nestori, Arvo, Eino and Reino Saarelainen built a solid base for the industrial production of log houses early on in the business in Lieksa. At their saw and planing mill the brothers built the machinery they needed themselves – at that time the construction of log homes was a done on a very small scale, without industrial machinery. Honkarakenne is still behind many of the innovations made in industrial log production.

The brothers’ most important invention was perhaps the world’s first round log machine that ran on a Zetor gearbox. Somewhat surprisingly, the machine also produced patterns on the wood’s surface. The patterned round log machine proved to work well. The first mechanically produced round log villa at Lieksa was completed in 1964 – the first in the world.

The product range gradually expanded from sauna cabins made of planed and round logs to larger summer cottages and family houses. The company, which operated under the name Honkatuote, opened the first log house exhibition in Tuusula, southern Finland, in 1966. Honkarakenne Oy was established as Honkatuote’s sales company at the end of the 1960s. Honkarakenne Oyj’s head office and the largest log home showroom in Europe are still based in Tuusula.

With the expansion of operations, more factories were needed. The first Honka mill was founded in Lieksa in 1960, the next ones were opened in Ikaalinen in 1967 and in Karstula in 1971. The Paltamo mill began operations in 1988, and the Alajärvi mill – Finwood – which specialises in laminated logs, was acquired in two phases over the course of 1991 and 1993. The Paltamo mill was demerged into a separate yard and garden product manufacturing company in 2006. The mill was renamed Finwood Oy in conjunction with the company acquisition. The operations of the Ikaalinen mill were spun off into PW Windows in 2001, and it was decided to close down the Lieksa mill in 2005. 

In-house production

The total output of the Honkarakenne Group is approximately 100,000 cubic metres, which means over 2,000 homes a year. There are currently two factories, the Karstula mill in Central Finland and the Alajärvi mill in Southern Ostrobothnia. 

The Karstula mill is Group’s biggest employer, providing jobs for 165 of the Group’s 440 employees. Karstula makes round log frames and some of the laminated log frames as well as the bulk of timber products for the buildings sold by Honka. The mill accounts for 38 per cent of the Honkarakenne Group’s frame production. Karstula produces some 700 homes annually. 

Honka’s logistics centre is located on the site of the Karstula mill. The frames as well as the windows, doors and other building materials included in the house kit are loaded at Karstula for delivery to Europe, the Far East, the US and Japan, in addition to customers in Finland.

The Alajärvi mill, specialised in the log gluing process, produces over half of the Group’s frame output, which mainly consists of laminated logs. The mill produces approximately 1,300 log frames annually. In addition, the frames for the timber frame houses built by TimberHeart Ltd, in which Honkarakenne has a 38 per cent holding, are manufactured at Alajärvi. The mill employs 120 people, 20 of whom focus on house design. There is also a factory shop at Alajärvi.

Continuous research and product development 

Right from the start, Honka has invested strongly in research and development. Nowadays, logs are a modern, highly processed building material. The company has dozens of patents and registered structural solutions that it protects in the various market areas. Approximately one million euros are invested in product development. The Group’s total annual investment expenditure is EUR 3-6 million.

Last summer at the housing fair in Hämeenlinna, Honka introduced a completely new type of product in log construction – a non-settling laminate log. International research co-operation, for its part, has shown that ambient humidity levels in homes built of massive wood are optimal for health. 

Genuinely Finnish

In addition to quality, one of the secrets of Honka’s international success is the material – genuine Finnish wood. Natural, massive wood is valued as a building material throughout the world. Wood is ecological, breathes and it is environmentally friendly – the advantages of buildings constructed of massive wood. Appreciation of Finnish high-tech and long experience in wood construction have also contributed to Honka’s global success. 

Honka is a major employer in Finland. Taking into account the company’s own personnel, builders, transportation companies and subcontractors, Honka provides employment for some 800 people. Honkarakenne is an entirely Finnish company: production takes place in Finland and only domestic wood is used as the material. 

Growth into world’s leading log house manufacturer 

Honkarakenne’s operations grew rapidly in the 1970s. The turning point was 1972, when 400 homes were sold in Japan. In 1978, net sales were EUR 3 million, ten years later EUR 27 million and in 1998 net sales reached approximately EUR 75 million. In 2006, the Honkarakenne’ Group’s net sales totalled EUR 85 million. 

In Finland, Honka is still the market leader in holiday homes and more than 80 per cent of Finnish consumers are familiar with Honka. Honka accounts for one fifth of the log buildings sold in Finland, and one in three log homes in the export market is built by Honkarakenne. 

Over 60 per cent of the Group’s turnover comes from family homes and product construction. Holiday homes account for a quarter. Holiday resort construction and associated projects make up 15 per cent of the turnover. 

Honkarakenne’s vision is to be an icon for quality log buildings, genuine wood houses and wellness through good living in the future, too.

The aim is for customers who value nature and high-quality living to find their dreams from Honka’s wide range of designs.

Stories to tell in jubilee year

Honkarakenne has chosen “Stories Over the Years” as the 50^th anniversary theme. During the year we will be hearing genuine tales about Honka homes, cottages, saunas and even castles. Stories and anecdotes abound, as there are more than 40,000 cottages, saunas and family homes built by Honkarakenne in Finland alone. This year a number of new designs will be launched, too. During the course of the year, the staff and other interest groups will be remembered. The well-being of the environment and social responsibility will be highlighted as well.