The Nordic Wave

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The Nordic Wave

Posted by Renato S. Beninatto on October 1, 2007 in the following blogs: Translation and Localization
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What do you think of when you hear "Scandinavia"? Ingmar Bergman, Marcus Schenkenberg, Nokia, Volvo, IKEA, Tandberg, herring, Lego, etc. With an aggregate GDP of just over US$1 trillion and almost 25 million inhabitants, Scandinavia needs to export its products and services to get any kind of scale. Since few people outside the Nordic countries speak their languages, that makes the region fertile ground for translation companies anxious to help local firms adapt their products for export. Add to this the influx of immigrants from new E.U. countries, Middle East, and Asia, requiring government and social services -- and you get more demand for translation.

In September, we were invited to speak at the Finnish Translation Company association event, and took the time to visit some buyers and sellers of language services in the region. We quickly found out that three companies are driving industry consolidation in the Nordic countries. Each is using outside money to acquire smaller players, apply professional management, and grow regionally.

AAC Noodi. While we were in Helsinki, we witnessed the result of a big translation deal -- Areva NP, a French-German company supplying a nuclear power plant to Teollisuuden Voima Oy (TVO) in Finland, awarded a 35 million word translation project to LSP AAC Noodi. AAC Noodi is the result of a series of acquisitions in the last couple of years by SanomaWSOY, the largest media company in Scandinavia with aggressive growth goals in the language services space.

Amesto Group. Maria Andersson from Sweden and Roy Arve Garvik from Norway told us that the Amesto Group also provides business process outsourcing and management consulting services. They see translations as a growth area for them and told us that more acquisitions might be on the horizon.

Semantix. Anne-Marie Colliander-Lind, the former face of Trados in Scandinavia and the new VP of Sales of Semantix AB, told us that today half of the company's business comes from community interpreting, but that she sees most of the company's future growth coming from traditional translation and localization business.

We also talked to Birgitta Stymne Göransson, CEO of Semantix AB (number 15 in our ranking of Top 20 translation companies) in Stockholm, and to Tuomo Räsänen from SanomaWSOY (a serious candidate for our list when we next update it) in Helsinki about their growth plans and their view of the market. Both are very positive and motivated about the outlook of the market. If we consider the fact that both companies compete in the same territory and practically don't know each other, we infer that there is still plenty of opportunity for translation growth in the Nordic markets.

What we didn't hear in our conversations was any plan to expand outside Denmark, Finland, Iceland, Norway, or Sweden. Since Nordic languages (together with Japanese) command the highest prices in the market, it is possible that high-cost production infrastructures prevent these companies from going into lower price language combinations. However, with strong currencies and lots of competition, we wouldn't be surprised if any of these companies start looking at the United States and Canada for acquisitions. On the sidelines, but also healthy and growing are companies like Kommunicera and Interverbum in Sweden; Arancho, Translatum, and Nouveau Koulutus in Finland; TLT and Tolken in Denmark; and Skjal in Iceland.

The cresting of this Nordic wave means good news to language service buyers in the region, as they can rely on LSPs that share their values and business ethics (these 5 countries are the least corrupt countries in the world).

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