Evaluating hydrogen investments adds value to clients

Hydrogen and its derivatives have long been a hot topic in the clean transition. Solutions are being sought from hydrogen and its derivatives to detach from fossil fuels, thereby reducing climate emissions, minimizing energy dependence outside the EU, and generally serving as an engine for the economy.

In 2023, the Finnish government set a goal for Finland to achieve a leading position in the hydrogen economy in Europe. The hydrogen strategy noted that Finland has the potential to produce at least ten percent of the EU’s emission-free hydrogen by 2030. This provides good prospects for companies to invest in new innovations and make investments, as a clean transition is inevitably coming.

Finland should aim at the top of the hydrogen value chain by attracting industries that use hydrogen to manufacture derivatives. For a hydrogen economy to emerge, costs need to drop, regulatory requirements need to be specified, and the functionality of the value chain and its role in bearing costs need to be examined.

For derivatives to be utilized, a lot of raw materials needs to be produced. Finland has excellent opportunities to fully launch the hydrogen economy and implement new investments, thanks to our geographical location, societal stability, high level of education, and our ability to produce raw materials needed in the power-to-X process.

We have space to build cost-effective green electricity production, such as wind and solar power, and our forest industry’s biogenic carbon dioxide is waiting to be harnessed for large-scale production of electric hydrocarbons. In electrolysis, the water used as raw material must be particularly clean, giving Finland a definite competitive advantage over many other countries. In Finland, water is already fairly clean and abundant.

The value chain will not be hindered by hydrogen infrastructure either, as Gasgrid, owned by the Finnish state, plans and develops a national hydrogen network that would connect both hydrogen producers and consumers and link Finland to the hydrogen economy market in Europe.

Hydrogen derivatives shape the future

It is important for businesses to identify where in the hydrogen value chain it is advantageous to position themselves. Project developers and energy companies can invest in hydrogen production facilities where green hydrogen is produced through electrolysis using renewable electricity. The produced hydrogen can be further processed or companies can aim for a broader position in the value chain and manufacture the derivative themselves.

Existing applications and markets for derivatives can be found, for example, in transportation and the chemical industry. Hydrogen can be processed into e-methane, which can be sold in the existing natural gas market in Finland and the Baltics through bilateral agreements.

The distribution obligation enables another existing market for e-methane. The EU increasingly requires emissions-free transportation, and the distribution obligation has been set so that a certain percentage of distributed transportation fuel must come from renewable sources. In 2024, the distribution obligation is 13.5% and will gradually rise to 22.5% by 2027. The distribution obligation also includes an additional obligation for so-called advanced fractions, such as e-methane, which is two percentage points of the total distribution obligation this year. This specific additional obligation opens up the market for hydrogen-derived products.

As maritime transport fully joins the EU’s current emissions trading system by 2026 and the Fuel EU Maritime regulation comes into effect, the pressure to adopt alternative and emission-free fuels increases. Ammonia and methanol are predicted to be the new fuels that could replace diesel in ships, and major shipping companies have already placed orders for ships that use these hydrogen value chain-related fuels. Demand is thus expected also in maritime transport.

In the value chain, we cannot rely solely on fuels. Ammonia is a significant raw material in fertilizers, thus touching the food industry. Methanol is a significant raw material in the chemical industry and also opens up the possibility of manufacturing plastics from fully renewable raw materials.

Steel can also be produced using hydrogen, which enables fossil-free steel production. The automotive industry has already shown interest in fossil-free steel as enlightened consumers and companies increasingly demand more environmentally friendly vehicles. The share of renewably produced steel in the total cost of car production is still moderate but accelerates investments in green steel production.

Race toward a leading position in the hydrogen economy

Competition for industrial investments related to the hydrogen value chain will be fierce globally, but also within the EU. In this race, it is possible for us to secure the future well-being. In recent years, EU countries, primarily industrial giants like Germany and France, have supported green transition projects with billions of euros.

Finland may not win this support race, although the government in the April framework session decided to target a tax credit for large and especially green transition projects. A tax credit could be granted for 20% of the total investment amount of the project, but no more than 150 million euros per individual project.

The permitting process is also becoming clearer and faster with the new so-called clean transition placement permit, as municipalities can, if they wish, combine zoning and permitting phases. The state does what it can to facilitate investment decisions and smooth the process, but ultimately Finland must compete with its advantages, such as our ability to produce significantly cheaper renewable electricity, our forest industry’s biogenic carbon dioxide emissions, and clean water.

We hold the winning cards that enable various hydrogen value chains. With these, we can secure our place as a leading hydrogen economy and achieve economic well-being for the entire society.

Fimpec as a partner in hydrogen and power-to-X projects

We at Fimpec have been at the forefront of developing the hydrogen economy since 2014 and have acted as a partner in green hydrogen and Power-to-X pioneer projects, including those of P2X Solutions and Nordic Ren-Gas Oy.

Our strength lies in recognizing market potential, evaluating investment profitability, and advancing projects. The biggest question for customers right now is cost: how to reduce the production cost of hydrogen and who to sell the clean hydrogen to?

Our management consultants support our clients in project evaluations, help identify off-takers for hydrogen and its derivatives, produce market and techno-economic feasibility studies, and outline the big picture of positioning in the hydrogen value chain.

Want to know more? Contact:
Jussi-Pekka Kuivala, Director of Energy Consulting, Fimpec Consulting Oy
jussi-pekka.kuivala(at)fimpec.com
+358 40 837 8095

Raimo Kaunismäki appointed as Project Director at Fimpec

Fimpec bolstered its expertise and resources for executing large investment projects at the beginning of March when Raimo Kaunismäki started as a project director at Fimpec. Kaunismäki has spent his entire career in various project management roles, especially in the process industry and infrastructure projects. He has extensive experience as a project manager, project director, and head of project departments, both in Finland and internationally. Kaunismäki graduated in 1992 with a Master of Science from Aalto University, specializing in process engineering and industrial management.

Kaunismäki joined Fimpec from Infinited Fiber Company, where he held a Project Director position. He mentions that the opportunity to implement interesting and challenging projects attracted him to the role.

“Fimpec is a reputable and growing company that offers many opportunities. I feel it also allows me to utilize my skills in a diverse way. I have been involved in projects as a client’s representative, an engineering/consulting firm’s representative, and an equipment supplier’s employee, so I have gained experience from different perspectives,” says Kaunismäki.

“We have been working in project management roles for significant industrial investments for a long time, and it’s great that the opportunities we offer attract leading professionals in our field. Raimo strengthens our organization’s capability, especially in extensive and demanding investment projects, and I welcome Raimo to successfully execute projects together with our clients at Fimpec,” states Mikko Turunen, Managing Director of Fimpec PMO Oy.

For more information:

Mikko Turunen
Managing Director, Fimpec PMO Oy
Phone: 040 844 7566
Email: mikko.turunen@fimpec.com

EPCM and EPC in clean transition projects

Sami Nissinen, Jorma Paananen and Tero Siintoharju.

Projects in the clean transition often involve actors who lack experience in managing large and demanding construction projects. However, these projects need to be completed cost-effectively, within budget, and without surprises. EPCM (Engineering, Procurement, Construction, Management) model offers a tested solution for industrial investment projects of varying sizes. In this model, the client employs an EPCM Consultant to assist in all phases of the project.

At Fimpec, we are familiar with this type of operation from various projects. The division of labor between the client and the EPCM Consultant can vary depending on the project and the client’s needs, but a typical division is as follows:

Client

  • Sets the project timeline and content requirements.
  • Reviews and approves plans in a controlled manner.
  • Participates in procurement negotiations, sets procurement frameworks, and signs procurement contracts.
  • Monitors the project.

Fimpec’s EPCM Consultant

  • Develops and maintains the overall project schedule, leads the project.
  • Oversees the creation of implementation engineering documents.
  • Prepares technical and commercial inquiries for procurements, sends out inquiries, receives bids, and provides procurement recommendations to the client.
  • Oversees project equipment and facility deliveries.
  • Maintains project engineering documents.
  • Supervises construction and the construction site.
  • Oversees installation and commissioning.
  • Supervises training.
  • Compiles the final engineering documentation.

Expertise and experience at the client’s disposal

The role of an EPCM Consultant can be summarized as helping the client in every aspect of the project so that decisions are based on adequate understanding and expertise. This means the consultant must convey what the client does not know and where potential project risks lie.

To achieve this, the EPCM Consultant needs expertise in engineering and its subcontracting, scheduling, procurement, as well as construction management and related supervision. At Fimpec, we solve this by utilizing the expertise of our specialists in various areas.

This way, we can see things on behalf of the client and ensure that the project progresses according to the plan we have developed together.

The importance of procurement expertise cannot be overstated. In industrial projects, the significance of timely and on-schedule procurements is crucial for the project to proceed on schedule. This requires deep experience in both procurement and the industry, not to mention an understanding of cultural differences between procurement countries.

What alternative does EPC offer?

Especially in wind and solar power projects, EPC (Engineering, Procurement, Construction) model also emerges as a delivery option. Here, the client makes a contract with an EPC Contractor, who takes responsibility for the entirety: engineering, procurement, and construction, and makes their own contracts with subcontractors and equipment suppliers.

Thus, the client is in a contractual relationship only with the EPC Contractor, who delivers the facility on a turnkey basis. In contrast, in an EPCM project, the client makes contracts with equipment suppliers and contractors with the help and support of an EPCM Consultant.

From the owner’s perspective, an EPCM project is often more clearly defined and therefore more cost-effective solution. However, it’s important to note that the risk of success lies more heavily with the client compared to the EPC model, where risks are generally lower but the price higher due to the contractor’s total risk reservation.

EPC projects are also familiar to us at Fimpec, and we are currently involved in the solar park project being built by investment company Exilion in Simo, which is being implemented with this procurement method. We have been involved in the project from the preparatory phase and now act in the implementation phase in an Owner’s Engineering role supervising the EPC Contractor. Practically, we take care of the client’s interests on their behalf.

The right implementation model should always be considered case by case

Projects vary, and it’s important to note that no specific implementation method is an intrinsic value in construction projects. The starting point for selection should be the objectives set for the project and examine which implementation model best helps achieve those objectives. Thus, it’s not advisable to stick to the first procurement form that comes up but to thoroughly consider the pros and cons of different options for that specific project with its unique characteristics.

This is also how we operate in projects where we are involved from an early stage. We offer our experience to the client and together seek the most suitable implementation method for the project to maximize benefits with minimal input.

Case-specific consideration is a good starting point for all construction projects, but as construction projects related to clean transition increase, it’s interesting to ponder how the project models presented above function in them.

A decisive factor in the choice of delivery options is the complexity of the project and its level of technological novelty. As projects become more complex, the pool of actors and suppliers willing and able to take responsibility for the entirety under the EPC model decreases, or at least the bid price increases to such an extent that the solution may not necessarily be the best from a business perspective.

Simplistically, projects that apply established technology, such as solar park projects, are in many cases suitable for EPC deliveries. In these, the construction project’s entirety mainly consists of the solar power system and infrastructure construction and is often so straightforward that an EPC Contractor can be found at a reasonable price.

Renewable energy projects at the other extreme, such as hydrogen economy projects, contain very different areas, many of which require both specific expertise and concurrent technological development. For such projects, EPCM is generally a better option as the risk is shared between the client and the supplier.

Wind power projects and the emerging hybrid power plant projects fall between these extremes. Based on our experience, they are often so diverse that EPC delivery is not possible at the desired price, while EPCM often provides a viable option for their implementation.

Would you like to discuss your construction project and how we can assist in its completion?, Contact us:

Sami Nissinen, Business Unit Director, Fimpec Energy Services
Phone: +358 40 348 5401
Email: sami.nissinen(at)fimpec.com

Jorma Paananen, Business Unit Director, Fimpec Project Management Services
Phone: +358 400 347 373
Email: jorma.paananen(at)fimpec.com

Toward Data-Driven Manage­ment

In the management of large and complex investment projects, obtaining up-to-date information for project management use remains a challenge. Despite the potential offered by the proliferation of information models and their usage, an effective method for this has not yet been developed. However, the situation is now changing.

At Fimpec, we have progressed to the point where we are implementing a solution in our projects that enables true data-driven management. It is model-based, simple for users, visualized, current, and allows for the exploration and optimization of alternatives.

How do we enable data-driven management, and why are we successful?

Our solution leverages information models, integrating them with other types of data typically produced in investment projects. It closely links to our existing automatic quantity surveying service, enabling precise, detailed tracking of quantities and their changes. Thus, we gather comprehensive data on project schedules, costs, environmental conditions, contractor performance, and other aspects. By collecting and analyzing this data using our custom formulas, we gain a holistic view of project dynamics, facilitating informed decision-making.

Data management is key. Information is continuously collected, analyzed, and used to produce reports that guide decision-making. Ultimately, this data is archived and utilized in planning future projects.

Our solution recognizes that despite the use of information modeling and the abundance of data in large investment projects, existing information has not been effectively refined and used in project management. To address this, we developed a system where schedules, costs, and other monitoring data are combined into a single database, easily reportable to project management and, for example, investors.

This has always been a goal of information modeling, but progress has been hampered by issues such as proprietary software interfaces, which have now been opened up. There has been a focus solely on information modelling, waiting for it to solve everything. We, on the other hand, have taken a broader view: if the information model lacks certain data, we can import it through another route and integrate it with the model. Combining models and data provides real-time quantity and cost information that is constantly updated, resulting in useful and meaningful data.

How is the information displayed and used?

In our data-driven management solution, reporting of the aggregated data is based on real-time, precise visualization, making it easily understandable and user-friendly. The integration of BIM models and external data sources enables this, allowing us to tailor information to the needs of different target groups.

We can provide investors with real-time information in an easy-to-understand format, for example, through weekly reports, using a few indicators that give an immediate overview of the current general situation of the project and its progress regarding costs and schedules.

If desired, it is possible to delve deeper into the data, which shows in more detail what has happened in the project and the reasons for the changes of interest. This project management-directed information enables comprehensive project monitoring, for example, through the use of S-curves that track production progress and costs relative to the schedule. It also enables life cycle assessment (LCA) calculations and detailed carbon footprint reports for managing low carbon footprint over the entire lifecycle of a building.

From a data-driven management perspective, it’s crucial that the data can be examined in such detail that things can be seen down to the precision of a structural component. Project management can view the current situation, for instance, how many piles and pillars are needed according to the plans relative to the budget, their cost, what has been installed, what hasn’t been installed, and how they are progressing in terms of schedule.

What are the benefits of data-driven management?

The enablement of data-driven management primarily means that correct decisions can be made at the right time in an investment project. By collecting and refining actual performance data, deviations are quickly identified, enabling proactive measures. We can see more quickly where the project currently stands and where it will go if no steering actions are taken. Ideally, project management can focus on resolving issues before they occur.

At the same time, bureaucracy decreases with fewer reports, less data collection, and fewer excel spreadsheets to combine. In theory, we could have one report that includes different views and updates as the background information changes. When reporting occurs on a single platform, there’s no need for excels, PDFs, or software requiring investment and training.

From a learning and future project perspective, a significant benefit is also that the project can always be rewound to any desired point and the entire project deconstructed in detail afterward. This is possible because data is continuously fed during the project and collected in one place. Hence, we know precisely who did what, when, and what was billed afterward. This reduces disputes but also offers entirely new opportunities for learning. By identifying aspects of the project that have gone better or worse than expected, we can get to the root causes by accessing and analyzing the data.

Having all project-related information systematically documented in this manner provides an incredibly strong foundation for planning future projects. Continuous data collection and management enable multi-project management, where historical data is used to improve efficiency in future projects.

What does the transition to data-driven management require from project participants?

Often, even fundamentally good reforms are challenging to implement because they require changes in working methods, training, or investments. One of the starting points for our solution was that it does not require software purchases, training needs, additional work, or changes in working methods from either our clients or contractors. The only requirements are the use of an information model in the project and the systematic maintenance of data.

In this data maintenance, we have kept to formats familiar to contractors. Behind them, our own formulas run, enabling the extraction of metrics from the data for decision support. The difference is that whereas data is currently filled in, for example, monthly and forwarded, with data-driven management, it can be filled in daily, providing continuous updates on project progress.

Where are we now?

As stated at the beginning of this article, the new solution is being gradually implemented. Currently, we are at a stage where each component has been put into production, and efforts are being made to integrate them into a single package.

The author, Senior Consultant Kim Hagelberg, has played a key role in the development of data-driven management at Fimpec.

For more information on how Fimpec leads with data, contact:

Johan Appelqvist
Operative Director, Cost management
Phone: +358 50 466 0907
Email: johan.appelqvist(at)fimpec.com

Fimpec Group’s Revenue Surpasses 50 Million Euros

2023 was a year of robust growth for Fimpec Group. Revenue rose to 50.5 million euros (up from 41.1 million in 2022), and the workforce numbered 440 at the end of 2023 (up from 389 in 2022). By the end of the fiscal year, the market situation, particularly in project management, energy engineering, and industrial engineering units, propelled the company’s bid portfolio to an all-time high. However, EBITDA dropped to 1.7 million euros (down from 3.0 million in 2022). The decline to below the industry average in EBITDA was attributed to investments and recruitments associated with rapid growth, as well as internal restructuring.

“Behind this positive development are our successful strategic choices and customer satisfaction. Our skilled and experienced staff has repeatedly succeeded in winning orders and maintaining trust with clients in highly demanding projects,” states Jukka Nieminen, CEO of Fimpec.

Fimpec Continues Its International Expansion

In addition to its Finnish company, Fimpec has subsidiaries in Sweden, Estonia, and Germany, emphasizing its expansion and operational footprint within Europe. The company’s progress in these countries continued as planned.

In South America, Fimpec strengthened its presence and sought new client relationships in the energy, forestry, and mining sectors. The South American market, already familiar to Fimpec from long-term forestry projects in which it has been involved in both engineering and project management, presents significant opportunities. Subsidiaries in Uruguay and Chile serve this market.

Fimpec Focuses on Clean Transition and Energy-Intensive Sectors

In 2023, Fimpec decided to seek growth particularly from opportunities offered by the clean transition in the industrial sector and services for energy-intensive sectors, including the battery value chain and critical minerals. These expanding markets offer Fimpec the best opportunities for profitable business growth in the coming years.

“Our strategic choices are linked to the market situation. The potential of the clean transition market can be seen from the Confederation of Finnish Industries, EK’s, green investments data window, which indicated that the total sum of investment plans related to the energy transition had risen to nearly 240 billion euros by March 2024. The significant increase in interest rates and cost inflation during 2023 affects the realization and schedules of investments, but there is still plenty of work in their preparation, even if not all investments are implemented immediately,” explains Nieminen.

To implement its strategy, Fimpec expanded and sharpened its service offering in the energy sector during 2023. Additionally, the company ventured into management consulting, establishing Fimpec Consulting Oy to offer independent advice related to the energy transition and clean transition to businesses seeking new directions and business opportunities.

Growth Expected to Continue

This year, Fimpec expects its revenue growth to continue as previous investments and strategic choices begin to yield results. The main theme for 2024 is profitable growth and the implementation of Fimpec’s growth strategy, taking into account market and investment environment developments.

“My personal concern is directed towards external factors in the industry in Finland. To attract future investments, especially from foreign investors, Finland’s appeal as an investment environment must be further improved. It’s crucial to maintain our level of education, cost competitiveness, and labor peace, which will help us attract investments to Finland,” Nieminen comments.

For more information:

Jukka Nieminen, CEO, Fimpec Group Oy
Phone: +358 40 557 4547
jukka.nieminen(at)fimpec.com

Fimpec encourages and supports its employees in developing their professional skills.

Currently, Fimpec employs over 440 experts, recognized as top professionals in their fields. The company is perceived as an attractive workplace offering opportunities for engaging tasks and personal skill development. We are committed to maintaining this culture by investing in our staff’s professional growth and education, ensuring we serve our clients using the latest knowledge and methods.

We constantly think about how to encourage and enable our employees to develop their skills in a way that suits our workplace culture. This involves high professionals whose learning needs are highly individual. Our learning policy is based on a strong belief in the individual’s responsibility, motivation, and desire to learn.

This means every employee is primarily responsible for their own learning and skill development, considering their interests and career development goals. As a company, we want to encourage and support each individual’s active learning. We explore various training and learning courses to enable every employee to develop their skills and achieve their professional goals. To this end, we have established the Fimpec Academy, among other initiatives.

Another key aspect of our learning policy is fostering a learning organization culture. We aim to create and maintain a culture where learning and knowledge sharing are everyday activities. This involves encouraging open communication, information sharing, and collaboration across teams and departments. The idea is that every employee can mentor others. To achieve this goal, we continually develop coaching and mentoring. This is crucial as, according to the well-established 70:20:10 model by Robert Eichinger and Michael Lombardo, the majority of employee development and learning occurs through work, interaction, and collaboration with others. Peer support from colleagues is essential and a hallmark of how we operate at Fimpec.

Fimpec Academy Facilitates Learning Pathways

The aforementioned Fimpec Academy supports our learning policy. It plays a role in implementing our learning policy on a practical level, including continuous assessment of our staff’s learning needs and searching for and informing them about relevant training opportunities. When necessary, Fimpec Academy also organizes customized training for the whole of Fimpec and various organizational needs if there are widespread needs. For example, a project management training course was conducted in the fall of 2023.

The focus has been on independently completed courses, which are widely available, ranging from short targeted training to large learning packages. Our staff can undertake these to develop their professional competencies. Identifying good courses and their scheduling has been a challenge, which is one reason the Fimpec Academy was established. Feedback indicates that the threshold for participating in training has been lowered when we can provide this information. Our staff has taken advantage of training in clean transitions, leadership, and mentoring, but a wide range of courses is continuously available, including on topics related to occupational well-being.

In addition to the training selection and provision by Fimpec Academy, self-development and its goals are a central topic in performance discussions between supervisors and employees.

Collaboration with Universities Benefits All Parties

Part of our learning-related activities includes collaboration with universities. Fimpec traditionally offers internships and thesis positions to students from various disciplines to support their graduation. We also visit educational institutions to share insights into what working life is like in a specialist organization like ours. Additionally, some of our experts lecture on their specialties at various institutions.

From our staff’s perspective, participating in educational collaboration offers an opportunity to expand their expertise into a new area, which involves sharing knowledge and evaluating their own competencies and work-life perceptions. From my own experience, I can say it’s exciting and rewarding.

The author, Pekka Silvennoinen, is a seasoned Automation Engineer who became passionate about studying to become a professional teacher at the Jyväskylä University of Applied Sciences (Jamk) Professional Teacher Education while working at Fimpec. He now serves as the Competence Development Manager of Fimpec Academy and also teaches at Jamk.

For more information
Pekka Silvennoinen
Competence Development Manager, Fimpec Academy
Phone: +358 50 4639 640
Email: pekka.silvennoinen@fimpec.com

Hannu Johto appointed as the Leading Process Specialist for the Batteries & Critical Minerals business unit

In January 2024, Hannu Johto, who joined the new Batteries & Critical Minerals business unit, brings versatile expertise and experience in battery value chain and mineral processes, along with related business operations, to Fimpec as the Leading Process Specialist. His specialized knowledge includes pyrometallurgy.

With over 10 years of experience in the mining industry, Johto has served as an expert in numerous extensive projects, overseeing diverse development tasks such as quality development, business development, leading process engineering, and sales. Previously, Johto has worked with companies such as Sweco and Metso.

In his role as the Lead Process Specialist, he will be responsible for growing and developing the business by acting as a Project Manager and as a Process Engineer in collaborative projects. In his work, he reports to Sami Ström, the Business Unit Director of Batteries and Critical Minerals.

“I am particularly excited about Fimpec’s international projects and the opportunity to utilize my core expertise in them. As far as I know, I am the first specialist in pyrometallurgy at Fimpec, and I believe that my expertise will bring significant added value to the business unit,” Johto says.

According to Sami Ström, the Business Unit Director of Batteries & Critical Minerals, Johto’s extensive experience significantly strengthens Fimpec’s expertise portfolio and supports a determined growth strategy.

“Johto’s specialized expertise complements our unit excellently. His extensive knowledge in the mining industry, and his specialized expertise are an essential support for achieving our growth strategy goals,” Ström mentions.

For more information:
Sami Ström
Business Unit Director, Batteries & Critical Minerals
+358 40 596 5029
sami.strom(at)fimpec.com

Automatic quantity calculation improves construction project management – and saves money

In large construction projects, it is common for budgets, schedules, or both to fail. For example, Bent Flybjerg’s research Introduction: The Iron Law of Megaproject Management study (The Oxford Handbook of Megaproject Management, Oxford University Press, 2017), notes that 91.5 percent of megaprojects exceed their budget or schedule. In large construction projects, the average budget overrun is 62 percent. The database used in the study included 16,000 construction projects from 136 countries.

A significant contributing factor to budget overruns is usually poor management of quantity data. Often, the connection between the budget and actual quantities and costs is lost during the construction project, and worst of all, too often this gap between the plan and project cost realization is only revealed in the final calculation, causing an unpleasant surprise. It is difficult to address these problems and prevent the accumulation of extra costs when there is no numeric data available during the project.

The reason for losing this connection is the manual calculation process used in quantity calculation, where quantities and their resulting costs are calculated from the plan. Manual quantity calculation is expensive, and that’s why it’s only done at certain stages of the project. In recent years, a solution to this problem has been sought through data models, but investments in them rarely pay off because the model is not effectively optimized and utilized.

Real-time information on project progress

However, this does not have to be the case. Technologies, modelling expertise, and the ability to process large amounts of data have developed rapidly in recent years, enabling among other things, the automation of quantity calculation and thus its transformation into a continuous process, even though the equation is still not easy.

At Fimpec, we have seized these opportunities and combined them with our extensive expertise and experience in large industrial construction projects as well as BIM-based cost, in which Fimpec pioneers in. Based on this, we have developed automatic quantity calculation based on IFC models used in 3D engineering. They provide the necessary data, for which we have developed an automatically functioning process for classifying, enriching, and refining it into user-friendly form, providing continuously updating quantity information for monitoring the construction project and decision-making.

We are pleased about the result and believe that it will elevate cost management in large industrial investment projects to a new level and meet the demands of today. Therefore, it is the market’s only automated quantity calculation service that provides real-time information on the progress of the project throughout the project from initial planning to final calculation. With this service, it is possible to monitor quantities and their changes accurately and by area. This enables decisions to be based on real situations and correct figures, not just a plan. This avoids unpleasant surprises during the project and at the end, avoids overestimation of quantities, reduces decision-related uncertainty, enables immediate intervention in schedule as well as cost deviations.

Potential savings of 2–5 percent in costs

From the client’s perspective, the essential benefit of automatic quantity calculation is that by using real-time information, unnecessary costs can be prevented, thereby achieving savings. When the project is managed with the support of automatic quantity calculation and cost management, the potential for cost prevention varies from 2 to 5 percent depending on the size of the project compared to the traditional project model. Savings occur in several areas of the project:

  • Waste is minimal because the quantities needed are known precisely: planning is more accurate, only what is needed is purchased, contracting is guided by quantity calculation corresponding to actuality, unplanned work is further billed.
  • Data-driven engineering is possible when quantity information corresponding to reality is available in the planning phase. This helps identify overly expensive planning solutions and reduces change work costs.
  • Delays and other unexpected costs are reduced due to collaboration: better managed logistics, better managed scheduling, and reduced waiting bring efficiency to production and enable streamlining of operations.
  • There are fewer disputes and their resolution costs when there are up-to-date facts about what should have been done and what has been done are available. Project management operates smoothly.

In addition, a good data model and correct planning save maintenance costs. Likewise, rapid completion of the project saves capital costs and enables rapid start-up of operations. Cost and time savings also result from the constantly updated quantity calculation, as the material required for the final calculation is essentially ready when the construction project is completed, and the final calculation is done with little effort.

One additional advantage is the traceability of quantity calculation data, as each of the sums produced by the service can be explored, broken down into parts, and traced back to what it consists of. Thus, it can be shown how the price of each area is formed from different components, their location, and which plan they originate from. From a future perspective, the benefit is that project data becomes available to the end client. It offers the opportunity for the client to learn from their own projects and utilize information in future projects in a completely new way.

All this is achieved with costs that are about 20 percent lower than in a project where equivalent quantity calculation is done manually. Therefore, we dare to promise that investing in automatic quantity calculation will pay off many times over in a construction project.

Easy to implement

One of the advantages of the service is that it does not require any special skills or expertise from the client. The only requirement is that the client commits to 3D engineering because the information obtained from it is the basis of the calculation. Nothing out of the ordinary is required, just systematicity.

From the perspective of a construction project, it is beneficial that Fimpec is involved in defining the modelling requirements from the very beginning. Acquiring the service is possible even in the later stages of the project, but then it likely requires additional work. In the early stages, the possibilities for influence are at their highest because the operating methods can be agreed upon with the engineers right from the beginning and get systematicity to work better. Likewise, making any changes in the early stages is easiest and the costs of changes are low.

In this article, I have intentionally focused solely on our automatic quantity calculation service. However, it can also be supplemented with other services, such as participatory cost management service, which in addition offers quantity calculation service throughout the project, expert support, guidance in engineering, verification of changes, and coordination of participatory cost management between parties throughout the project.

Writer Sebastian Nybäck works as BIM Manager at Fimpec and has played a key role in the development of automated quantity calculations.

If you are interested in learning more about automatic quantity calculations and related proactive and participatory decision-making, please contact

Johan Appelqvist
Operative Director, Cost Management
+358 50 466 0907
johan.appelqvist(at)fimpec.com

Olli-Matti Airiola appointed as the Operational Director for Fimpec’s Project Management Services in Kokkola

Starting on February 1, 2024, as the Operational Director for Project Management Services in Kokkola, Olli-Matti Airiola brings comprehensive and diverse expertise to Fimpec in the conceptual development of industrial areas and the execution and management of construction and infrastructure projects.

Airiola has previously served as the CEO of KIP Service Oy and Kokkolan Teollisuusvesi Oy. As the CEO of KIP Service, he was responsible for creating and developing various service, product, and pricing models on the Kokkola industrial estate, and leading their implementation.

In his role as Operational Director, he will be responsible for the project management and leadership tasks in the industrial and energy sectors, as well as sales and customer relationship management in his designated area. As the business area in Kokkola evolves, Airiola will also act as a supervisor and developer within the organization. He will report to Mikko Turunen, the Managing Director of Fimpec PMO.

“I have strong networks in many of Finland’s industrial areas, in addition to KIP. I believe that my extensive expertise in the development of industrial areas and project management of industrial investments can be utilized in the growing Fimpec. The numerous investment projects planned for the Kokkola area also bring positive prospects for Fimpec’s future,” anticipates Airiola.

According to Mikko Turunen, Airiola’s move to Fimpec significantly strengthens the company’s local expertise on the west coast and is part of the determined implementation of the growth strategy.

“Airiola’s expertise diversifies Fimpec’s service offerings in the development of industrial parks and project management services. With Airiola’s experience and extensive networks, we have the opportunity to expand our operations to Central Ostrobothnia in line with our growth strategy,” Turunen states.

More information:
Mikko Turunen
Managing Director, Fimpec PMO Oy
phone: +358 40 844 7566
email: mikko.turunen@fimpec.com