Preparation for merger of Hansel and KL-Kuntahankinnat

Preparations for a merger of Hansel and KL-Kuntahankinnat Oy started in the spring of 2018. The goal of the merger is to create one service point for the handling of joint procurement by the state, municipalities and provinces to be established. The plan is to develop procurement expertise and combine procurement projects into larger wholes to boost the effectiveness of procurement and achieve savings. The change will also enable the use of more standardised operating methods in public tendering, which will make it easier for companies to participate in public tendering.

The Cabinet Committee on Economic Policy discussed the merger of KL-Kuntahankinnat Oy and Hansel Ltd on 18 May 2018 and a delegation of the Association of Finnish Local and Regional Authorities made a decision on the merger on 24 May 2018. An amendment of the Act on a Limited Liability Company Called Hansel Oy (the “Hansel Act”) entered into force on 1 January 2019. Initially, the plan was to realise the merger at the beginning of 2019, but a decision on an extension for the preparations was made in late 2018 and the merger was postponed to the second half of 2019.

Better joint procurement

Strategic management of procurement and procurement expertise have been discussed a great deal in the past few years. Furthermore, more specific information on how tax revenue is used is needed to support the organisation of procurement and related decision-making. Promotion of these issues was a key reason for the establishment of a joint procurement unit.

“It’s great that the reform will allow experts from two companies to merge their expertise and create even better operating methods together. Key issues in the development work will be a systematic and goal-oriented approach, as well as automation,” says Anssi Pihkala, Hansel’s Managing Director.

Professionally managed procurement requires not only product expertise, but also extensive knowledge of procurement legislation, customer needs and the market. When arranging tendering, the joint procurement unit pays attention to the responsibility of procurement and the promotion of innovation, among other issues.

The merger of Hansel and KL-Kuntahankinnat will enable a faster digitisation of procurement processes and tools, which will make the operations smoother and faster in both the procurement units and the supplier companies. The provision of versatile procurement development services to a broader customer base will also start in stages.

The total value of all procurement projects of municipalities and the state is some €35 billion per year, of which the share of the merged Hansel is expected to be some €3 billion. The savings potential in joint procurement has been assessed as more than 20%. The greatest efficiency benefits and savings in joint procurement will be achieved by procuring products and services that are in high demand and can be standardised. This will allow the largest savings, which is an issue expected from public procurement, in addition to high quality.