Tuomo Peltonen: "I could not have imagined a different kind of life for myself."

May 2020

Tuomo Peltonen founded ST-Koneistus together with his brother Seppo Peltonen exactly 50 years ago. In this article, Tuomo explains his starting point for becoming an entrepreneur and recalls the most significant events of ST-Koneistus in the 70s.

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Foreword

Since summarizing 50 years of history into one article proved to be a rather impossible task, we decided to divide the story into three parts. This is the first part of a series of articles, the other two of which will be published during the current anniversary year.

Let’s begin by stating that ST-Koneistus has manufactured demanding hydraulic products for a number of Finnish and international machinery and equipment manufacturers for 50 years.

The world has been turbulent before and over the decades, the company has witnessed oil crises, recessions, wars and nations collapsing.

Today, ST-Koneistus employs more than 60 employees and its products are delivered to dozens of countries around the world. This has not always been the case.

In 1970 there was only a lathe, Seppo and Tuomo.

“I asked Seppo if he would turn if I got the jobs. Seppo worked elsewhere as a turner at the time. He did not think long before resigning and so we became entrepreneurs.

Tuomo Peltonen, co-founder of ST-Koneistus

Road to entrepreneurship

The Peltonen family moved to Ylöjärvi from Ruukki in 1954. Local sawmill and brickyard had closed their doors, and Rautaruukki, founded by President Kekkonen, did not solve the unemployment in the area just yet.

“My father got a job here at the Outokumpu mine as a pebble miller, and my mother got a job at the Pyynikki beer factory.”

As you might imagine, many things were different in Finland in the 50s. For example, getting money from your own parents was a very strange idea. Despite, you could come up with money yourself.

Tuomo says that he made his first money even before school age by catching crayfish and collecting cones.

“Later, when we had already moved to Ylöjärvi, I also started trading copper, brass, and aluminum. At that time, I also practically caught crayfish semi-professionally.”

Tuomo feels his drive for entrepreneurship and his desire to take care of his own finances have been innate qualities over which he has not really had much say.

“I never consciously thought about entrepreneurship. It was perhaps only a matter of time before I finally became an entrepreneur. I could not have imagined a different kind of life for myself.”

In 1970, entrepreneurial spirit raised its head again. Tuomo had ended up studying at the Tampere University of Technology, after which he managed to get a job at a company called Hydrauliikka Osakeyhtiö. The company manufactured cylinders for Lokomo and Rauma-Repola that acquired it in 1970.

As soon as he got to work, Tuomo got an idea. He would start manufacturing cylinder parts for his own employer with the help of his brother.

“I asked Seppo if he would turn if I got the jobs. Seppo worked elsewhere as a turner at the time, and he did not think long before resigning and so we became entrepreneurs.”

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“They thought that it would be a waste of space, as working-class brats could not possibly understand anything about entrepreneurship!”

Tuomo Peltonen, co-founder of ST-Koneistus

First building permits from mom

Tuomo and Seppo bought their first lathe in the spring of 1970. The workspaces, on the other hand, were arranged in their homestead stable in Soppeenmäki.

In the early years, the brothers also tried to get an industrial plot from Ylöjärvi, but the municipality authorities did not swallow the idea.

“They thought that it would be a waste of space, as working-class brats could not possibly understand anything about entrepreneurship!”

However, the lack of space began to become a real problem at the latest when the brothers had hired a few outside employees. In addition, another lathe had already been crammed into the small stable, and a milling machine was on its way as well.

In the end, the space problem was solved, but it was not solved by the municipality.

“I thought that damn, we are building those facilities. We asked mom if she had anything against it if an 80m2 annex appeared in the backyard.”

And mom did not. Thus, the plinth of the first extension of ST-Koneistus was cast at dusk and the space itself was erected with a group of acquaintances during the weekend so that the municipality could not interrupt the construction project.

“Soon the municipality authorities started mumbling that: “those Peltonen brothers are crazy when they build halls without permits. We have to give them the plot.”  Thus, we got a plot from the municipality and without applying for it. It is this Hopeatie 3 where we are now”

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I thought that we can manufacture those too.

Tuomo Peltonen, co-founder of ST-Koneistus

Lesson learned in only catering for one customer

Rauma-Repola was an important customer of Hydrauliikka Osakeyhtiö, which in turn was the only customer of ST-Koneistus. For a few years, thousands of valves and cylinders went to cranes and forest machines manufactured in Tampere.

In the mid-70s, however, the banks stopped Rauma-Repola’s operations due to the oil crisis, and work dried up for the Peltonen brothers at once.

Soon ST-Koneistus had to furlough all its employees and the operation had to be practically started from scratch.

However, a new business opportunity emerged from literally out of nowhere. It had struck Tuomo that all the hydraulic sub-plates used in Finland came from either the German Boch Rexroth or British Vickers.

“I thought that we can manufacture those too. I drew similar products based on their catalogs and started selling them all over Finland. For example, Ponsse ordered a lot of sub-plates I drew from us in the 70s.”

Other customers also began to emerge at a rapid pace as the word of a more affordable and domestic supplier began to spread.

“In the end, we turned the work situation around rather quickly. We also learned what could happen if we only cater to one customer.”

By the turn of the 80s, ST-Koneistus already had several hundred customers. In addition, as technology advanced, productivity took significant leaps.


ST-Koneistus is Finland’s largest manufacturer of hydraulic manifolds and components specializing in demanding special series. For 50 years, our mission has been to help hydraulic companies and the mechanical engineering industry manufacture high-quality end products.