Case study

Kilo Co-operative Truck-Transport Company

Finland

Background

Kilo Co-operative Truck-Transport Company ( KOA) (Kilon Osuus-Auto) is a truck driver owned co-operative business established 25.9.1987. KOA is a successor of a transportation department of a major Finnish consumer co-operative SOK, which closed down its own transportation activities. KOA in now a successful medium sized transportation business with about 60 employees. KOA is operating mainly in Greater Helsinki Area, but it has also nationwide and international transportation contracts.

The options

When the news of the close down of the transportation department reached the truck drivers, they began to think what employment alternatives they had. At the time it was very easy to get a truck drivers job, but a group of drivers were interested to search the possibility to buy the trucks and the transportation licences of the SOK and to continue the parcel and foodstuff transportation business.

The process

The group consisted of trade-union activists, who had recently been in a training course of industrial democracy and they were also trained in the co-operative ideas and principles. Thus the idea of establishing a workers co-operative was somewhat familiar to them, although it was not at all familiar in Finland. At that time also the leaders of the transportation workers union were interested in the idea of an employee owned businesses. The group took with the help of their trade-union contact to the managers of the consumer co-operative and told them about their interest. By the same time they established the new workers co-operative KOA. After negotiations the consumer co-operative decided to sell the trucks to KOA in reasonable price and also help the co-operative to have the transportation licences needed in professional trucking.

The raising of the finance

The finance for the purchase was raised partially by the money from the shares bought by the members and mainly by a bank loan which was guaranteed with the trucks of the co-operative given as security and by personal guarantees of the members.

After the conversion

On 3 January 1988 KOA started trading as an employee owned business. At first the main client was the former employer of the members but soon the co-operative began to widen its client basis.

Trading began with 8 trucks and now KOA has a vehicle fleet of 27 transport units: vans and lorries plus articulated trucks. It has also its own repair shop. The KOA carries out mainly food and general cargo distribution in Greater Helsinki Area, but also sea container and freight transports. KOA has also its own routes to Russia and Central Europe. The Kilo Co-operative Truck-Transport Company ( KOA) has about 60 employees out of which 22 are members of the co-operative. As a member there is also the Trade-Union and two of its local branches.

Annual turnover of KOA was in 1997 about 20 million FIM.