Oxford Engineering in Estona

Oxford Engineering Eesti OÜ

Two hundred and fifty cruise ships visit Estonia’s Capital – Tallinn, each year.

Tallinn’s walled ‘Old Town’ is a World Heritage Site.

Estonia
Scandinavia’s best-kept commercial secret

Not surprisingly, being close neighbours, Finland, Sweden, Norway and to an extent Germany, were quick to realize the opportunity that Estonia’s freedom from Russian domination in 1991 represented. (It is a short 1 hour and 40 minute ferry ride from Finland’s capital Helsinki to Estonia’s capital Tallinn).

Estonia now has one of the most open economies in the world, ranking 4th after Singapore, Hong Kong and Malaysia, and benefiting from liberal trade and investment laws. The countries competitiveness is fuelled by highly effective infrastructure. Privatisation has been aggressively pursued with around 90% of the economy springing from the private sector. Competition and no doubt the close proximity of Nokia and Erickson has produced one of the highest internet and mobile phone penetrations in the world. Estonian’s don’t search for coins when they park their car, rushing back to feed in some more coins when their time is up – they simply book on and off via their cell phone, payment made on the phone bill - how else?

Joining the EU in May 2004 along with its Baltic neighbours Latvia and Lithuania has brought a further boost to trade although there is pressure from Brussels to bring taxation into line with other members that could dampen growth.

Average labour costs at approximately £480 per month; combined with high skill levels and a Scandinavian work mentality have proved attractive to more than 5,000 foreign investors. The large majority of them Scandinavia as well of course as a sprinkling of the big multinationals.

Low wage scales have not pushed Estonian down the intermediate technology road. It is rather the case of high productivity and making technological leaps. The grass in the park is not cut with scythes but the latest Kubota or Husqvarna ride on mowers, computerised machine tools are extensively used, the majority of banking is done via the Internet and roads are speedily constructed with the latest German equipment.

For the UK, Estonia represents excellent logistical advantages over some other Eastern European countries and is positively ‘next door’ compared with China or India. Flight times are only two and half-hours and road transport to the UK just 6 days or less, door to door. The time difference, 2 hours.

Estonia and Oxford Engineering Ltd

Responding to a delegation to Oxford from Estonia in 2004, facts were gathered and visits subsequently made to Estonia by personnel from Oxford Engineering to consider it as a source of low cost supply to our customers. Our findings were very encouraging. It was like we had stumbled upon an option with so many advantages that we could hardly believe it. It culminated in an extensive visit by Oxford Engineering’s Company Founder Alec Watts in the summer of 2004.

Estonia’s second city of Tartu was selected as a preferred location. Not unlike Oxford it has a similar population of around 100,000, and is home to the premier university of Estonia. Like Oxford, Tartu also has a river. It was a centre of high tech manufacture in Soviet times particularly with regard to aviation equipment and in particular ‘black box’ flight recorders. This facility still remains though now privatised and in the hands of a Swedish Group it is reported as being the largest sub-contract machining and assembly company in Europe.

A small base of subcontractors was selected in the second half of 2004 and work contracted out by Oxford Engineering to this group. In December Oxford Engineering Eesti OÜ was official registered. An office was acquired in Tartu and interviewing for staff took place. In January 2005 Alec Watts and his wife Pauline moved out to Estonia on a permanent basis to oversee the setting up of Oxford Engineering’s own facility in Estonia. In July 2005 four CNC machinists were sent to England for training, later in the month a batch of machines were sent to the new factory in Tartu where manufacturing commenced. From these small beginnings Oxford Engineering’s low cost manufacturing facility in the Baltic’s is developing.

Oxford Engineering Eesti OÜ was set up to produce low cost machined items and assemblies, in the low too medium volume sector, primarily for the UK market. Its range of ‘in house’ machines is under constant review ready to respond to customer’s specific needs. The supplier network is being developed and coached by Oxford Engineering to deliver ever yet higher standards of service. A wider range of services is developing as the needs arise. Recently a contract has been signed with a Tallinn Company to supply demanding stainless steel forgings at a very much lower price than the UK source.

Manned by a bright young team of people, Oxford Engineering Eesti could be viewed as an energetic stand-alone facility but is more than happy to sit under the umbrella of Oxford Engineering’s UK operation. Customers, knowing the history and reputation of the UK site, and the back up it can provide have confidence that, sourcing from Eastern Europe through Oxford Engineering UK is a no risk option.