share issue

SHARE ISSUE
SANGEN WHAT?
SANGEN WAS FOUNDED IN 2015. THE COMPANY HAS A COMPLETELY NEW APPROACH TO THE
ALCOHOLIC BEVERAGE INDUSTRY. SANGEN PRODUCES BEER, CIDER, GIN, WHISKY AND OTHER
DRINKS. HOWEVER, SANGEN DOES NOT CONTENT ITSELF WITH BEVERAGE PRODUCTION; THE COMPANY ALSO PRODUCES ITS OWN YEASTS, GROWS ITS OWN HOPS AND MANAGES THE SALES AND
DELIVERY OF THE FINISHED PRODUCTS.
The Sangen flavour is a handshake between the traditions of our northern ancestors and the fresh,
pure and trendy ingredients of the north. You will not have to wait long to savour the produce, as
Sangen intends to introduce its first beers at the Qstock festival next summer. Sangen and Qstock
have concluded a three-year contract. Sangen is responsible for supplying beer, cider and other alcoholic beverages to every sales point at the festival. Over 30,000 people attend the festival annually.
However, Qstock is only the start. Sangen is looking to become a significant alcohol supplier in the
Finnish market in the next five years and to start exporting pure northern beer.
Sangen will embark on this five-year journey with a share issue aimed to provide strong growth and
a gradual increase of production capacity to up to five million litres, the latter also within five years.
JOIN US!
This Oulu-based company is making a significant
cultural contribution by restoring beer production in the vacant production facilities of Lapin
Kulta. If all goes according to plan, we can treat
our taste buds to a new malt beer no later than at
Qstock next summer.
--- Kaleva newspaper on 16 January 2016
THE THREE TARGETS OF THE FUNDS
RAISED BY ISSUING SHARES:
THE TORNIO
BREWERY
THE SANGEN
LABORATORY
THE SANGEN
SALES NETWORK
THE TORNIO BREWERY
IT IS TIME…
TO TAKE BACK TORNIO
Sangen Ltd. will primarily allocate the funds from the share issue to Tornio Brewery. Brewery operations will be launched in cooperation with Tornio-based company Arctic Property. The initial capacity
of the facilities in Tornio is 400,000 litres per year. The brewery will be situated in the former Lapin
Kulta Brewery facilities, which served as a beer brewery for over 130 years until a corporate acquisition concluded with Heineken in 2008 led to closing the brewery in 2010. The production facilities
once renowned for award-winning Lapin Kulta beer are now vacated – just waiting for someone to
launch beer production. Many have voiced a welcome to the new brewery after the news spread
about the statement of intent between Sangen and the manager of the brewery facilities, Arctic
Property.
Cooperation between Sangen and Arctic Property does not only enable beer production, but revives
the oldest industrial plant in Lapland.
All work will be completed in an environmentally friendly manner. The goal is to commission 18
fermentation tanks and to produce half a million litres of beer annually, using production methods
that are as eco-friendly as possible to respect the nature of Lapland.
THE MOST NORTHERN DISTILLERY IN THE WORLD
Tornio Brewery will also host a small distillery. Sangen
intends launch the production of its own whisky label in
autumn 2016. In Tornio, the company can produce a
variety of alcoholic beverages to be stored in barrels.
While waiting for the whisky to mature, Sangen plans to
produce other alcoholic beverages, including gin. The
company is also looking into cooperation opportunities
with microbreweries. Tornio Brewery will have a canning
line and Sangen is particularly keen to work together with
microbreweries.
THE SANGEN LABORATORY
IT IS TIME...
TO BRING NORTHERN
FLAVOURS BACK TO LIFE
A laboratory located in Oulu forms the heart of Sangen. That is where northern flavours are
extracted from northern ingredients. In addition to different recipes, the laboratory specialises in
hydroponic hops farming, yeast culturing, extracting juice, and growing herbs. The goal is to start
farming Finnish hops.
WHY FINLAND? AND WHY OULU?
A cluster of research institutes and institutions of higher education in Oulu also support the growth
of Sangen. The company has access to the expertise of the University of Oulu, the Natural Resources
Institute of Finland, and Oulu University of Applied Sciences. Microbrewery activities have been
launched in Oulu in recent years and can generate a market for Sangen’s yeast and hop production.
The company operations will be expanded to cover all of Finland and the objective is for different
breweries around Finland to be able to further improve their great products by the use of hydroponically grown hops – who would not like a beer made of hops harvested after just one day of growth!
THE SANGEN SALES NETWORK
IT IS TIME...
TO SELL BEER FROM
NORTHERN FINLAND
Sangen will start constructing the national Sangen Shop network in 2017. The first stores included in
the network will be situated in Tornio, Oulu and Helsinki. The store network will be based on craft
beer. A Sangen Shop will offer, for example, locally brewed products. The Sangen Shop system will be
expanded into a network that covers the whole country and is intended to evolve into a Sangen Shop
franchise.
The brewery in Tornio will also include a tasting room for visitors and customers. Moreover, guided
tours of the brewery will be organised. Sangen also intends to develop a shop-in-shop system at
some point. In addition to the previously mentioned Qstock, Sangen’s products will be available in
tourist resorts in Lapland, where no beer from Northern Finland is currently available.
Sangen is looking to take over a significant share of the Finnish market within five years, but will not
contend with that. The company is going to launch export activities with chosen partners. There is a
demand for pure northern beer in, for example, China. Export activities, combined with the spreading craft beer boom, will enable Sangen's future growth.
GOOD BEER BY SANGEN
WATER, YEAST, HOPS AND MALTS ARE THE MAIN INGREDIENTS OF BEER. INGREDIENT DEVELOPMENT SERVES TO CREATE THE NORTHERN SANGEN FLAVOUR, A COMBINATION OF TRADITIONS,
FRESHNESS AND TRENDS.
Lappish water’s (competitive) edge
The Finnish original of the above was one of
the first advertising slogans for Lapin Kulta,
and for good reason. Since water is one of
the most important ingredients in beer, it
made perfect sense that an ad for Torniomade beer should praise the water supplied
by River Tornionjoki. Water is one of the
traditions Sangen intends to combine with
future product development. The location of
the brewery by River Tornionjoki, also known
as Väylä in Finnish, allows us to produce beer
using fresh, high-quality water. Sangen is
currently investigating the possibilities of
using this renowned river water for beer
production. It is time to harness the waters
of River Tornionjoki to lend a soft, arctic
freshness to beer.
Sangen develops its own yeast cultures
Yeast has a major role in beer production –
that is why Sangen develops and produces its
own yeast. Different beer types require
different kinds of yeast: the best choice for
ale may not be optimal for lager. Breweries
can now order fresh brewing yeasts from
Sangen, which allows them to produce even
better beer. For example, ale yeast is
cultured for three to five days while lager
yeast takes over five days to culture. The
time required for culturing yeast can be
anticipated, which allows us to use fresh
yeasts for beer brewing. Our laboratory also
develops freeze distillation, juice extracts
and herb cultivation.
Finnish hops
That is no typo! And not only Finnish hops, but the most
northern hops in the world. It is time to bring that once
common yard plant back into industrial service. At
Sangen, we believe that by combining the light level in
Finland with progressive cultivation techniques, we can
soon produce beer from Finnish hop varieties and even
offer those varieties for other industrial production,
including the cosmetic and pharmaceutical industry.
Research and development can create substantial business value. Finland offers an ideal growing season for
hops from April to September. The unique nature of
northern light, including white nights, provides excellent
conditions for growing hops when combined with an optimal level of humidity.
Farming hops in Finland is not a recent invention. Finns
have cultivated hops for the purpose of brewing beer
since the 1300s, which is slightly earlier than in Central
Europe. Finland was a pioneer in the field! In 1422,
Sweden-Finland issued a land act that required farmers to
grow hops. The hop plant became a common garden
plant in the following century. It is no wonder that the
Finnish national epic Kalevala has more to say about
brewing beer than the creation of the world. The oldest
documents in the world concerning hops date back to
4,000 BCE.
Sangen is launching a project to grow hops in a greenhouse. This allows us to produce ten times the crop
yielded by traditional farming methods. Standardised
weather conditions and optimal nutrition allow us to
develop new flavours and, most importantly, always use
fresh hops in beer production. The constantly growing
microbrewery industry in Finland creates a market for
individual hop varieties developed for specific breweries,
without competition. We can also introduce the Sangen
hydroponic system in international markets through
conceptualisation.
In addition to the brewery industry, the cosmetic and
pharmaceutical industries are interested in the different
components of the hop plant. Hop extracts contain antioxidants and can be exploited in, for example, the
cosmetic industry.
CHAIRMAN’S THESES
Sangen develops and grows its own yeasts.
We use local raw grain in addition to malts.
Directly from our environmentally friendly
greenhouse.
According to research, 90% of the water in River
Tornionjoki comes from the brooks that run in
the fells of Lapland.
The grain and mash left over from the brewing
process can be used in food production. Yeast
can serve as a protein source.
SANGEN’S FOUNDING SHAREHOLDERS
MIKKO AHOKAS
Mikko Ahokas is the Chairman of the Board of Directors of Sangen and has over 15 years of work
experience in the energy and environmental industry. Mikko holds a Master’s degree in biological
and environmental science. He has participated in, for example, developing and constructing St1's
internationally awarded biofuel concept, which is based on ethanol production.
OUTI FORSTÉN
Outi Forstén has over 15 years of work experience with ICT companies and the food industry. Outi
is a key figure behind Qstock and has also had marketing experience with a few other businesses.
Outi holds a Bachelor of Business Administration degree and has additionally completed some
university-level marketing studies.
SAMI HEIKKILÄ
Sami Heikkilä has served in top level management duties in the banking industry for over 15 years.
Sami has been a board member in two SMEs for a total period of 20 years and offers solid business
expertise. Sami holds a Bachelor of Laws degree and serves as an advisor at Sangen.
ANTTI-PEKKA KERÄNEN
Antti-Pekka Keränen is one of the shareholders as well as the CEO of Attorneys at Law Kokkolex Ltd.
Antti-Pekka holds a Bachelor of Laws degree and has served in different expert duties relating to
business law for over 15 years. Antti-Pekka serves as a legal advisor at Sangen.
VELI MATHLIN
Veli Mathlin holds a Bachelor of Horticulture degree. He serves as a senior lecturer at Oulu Vocational College. Veli has a decade of experience in garden plant and special plant production. At
Sangen, Veli provides expertise on utilising locally produced ingredients.
PEKKA NEVALAINEN
Pekka Nevalainen holds a Master of Science (Economics and Business Administration) degree and
has served in management level duties with an international industrial equipment manufacturer for
nearly a decade. He has experience in customer-oriented product and service development, valuebased selling development, and supply chain development as well as operational supply chain management. At Sangen, Pekka is responsible for service development and the supply chain.
JAAKKO PELLINEN
Chemist Jaakko Pellinen has been an entrepreneur for ten years. He has engaged in water treatment
business activities and is a professional in the field of monitoring and optimising water quality.
Jaakko is responsible for product development and laboratory operations at Sangen.
OLAVI RAUNIO
Olavi Raunio holds a Master of Science degree in the field of energy and technology. He is the head
of recovery business operations at energy company Adven. Olavi has 15 years of experience in sales
management, product development, consulting work, and entrepreneurship in the fields of energy
and environment and bulk logistics. Olavi has exceptionally diverse experience in industrial energy
matters as well as solid competence in B2B sales and launching new business operations.
ERJA RETZÉN
Erja Retzén has worked in the capital market for over ten years. In recent years, her responsibilities
have included customer management for previously listed companies and companies that are about
to be listed. Before that, she has performed challenging marketing, customer management and project management duties in different fields. She holds a Master of Science degree in production
economy and specialises in, for example, start-ups, the mining and mineral prospecting sector,
FinTech, and the game industry. At Sangen, Erja specifically participates in developing our investor
relations and partner network.
PEKKA SARLUND
Pekka Sarlund holds a Master of Philosophy degree and has served in management level duties in
the ICT industry for over 30 years. Pekka continues to be an active, cross-sectoral agent in the fields
of global ICT giants and SMEs alike. Pekka serves as an advisor at Sangen.
SANNA TASKILA
Sanna Taskila specialises in corporate research and development activities. She holds a Doctor of
Science (Technology) degree. Sanna has worked in projects related to, for example, the microbiological purity of beer, yeast culturing, enzyme utilisation, bioreactor development and waste utilisation
in the Chemical Process Engineering and Bioprocess Engineering research groups of the University
of Oulu since 2003.
JAMI TEIRIKARI
Jami Teirikari is an internationally awarded advertising, marketing and moving image expert. Films
directed by Jami have received dozens of awards in Finnish and international advertising competitions and film festivals in recent years. Jami is particularly renowned for food advertising. At Sangen,
Jami is responsible for marketing and product branding.
VILLE TÖRMÄNEN
Ville Törmänen is the CEO of R-Taso, a company specialising in the 3D design and production of
industrial walkway structures. He has been in charge of the company’s digital business development
and internationalisation for over seven years. Ville has over a decade of management board work
experience and he has completed a Master of Laws and an eMBA degree. Ville contributes to business development at Sangen.
LEO ANDELIN - THE PATRON
TO TOP ALL THIS KNOWLEDGE, COMPETENCE AND COURAGE, SANGEN HAS A PATRON. AND WHO
COULD BE MORE SUITABLE FOR THE JOB THAN MASTER BREWER AND FACTORY MANAGER LEO
ANDELIN, WHO WORKED AT THE LAPIN KULTA FACTORY FOR A PERIOD SPANNING OVER FOUR
DECADES?
As a rule of thumb, wines get better as you travel further south. Similarly, beer types improve as you
travel north. This was said by Swedish historian Olaus Magnus Gothus (1490–1557). Young Leo
Andelin gained hands on experience of this principle when he began work at the Lapin Kulta factory
in 1962, after completing his brewing studies in Germany and just a year before Lapin Kulta won a
gold medal in an international beer competition organised in Brussels. He served as the factory
director from 1984 to 1999. Andelin has witnessed the first steps of Lapin Kulta beer towards international success as well as President Urho Kekkonen’s visit to the brewery and many other things.
Leo would like to see beer production revived in Tornio. Operations at the Lapin Kulta Factory ended
slightly over five years ago, in 2010, due to a corporate transaction completed in 2008. Over 130
years of beer production history came to an end as production operations were transferred to Lahti.
Many still boycott Lapin Kulta products. According to Andelin, people miss and anticipate local beer
production.
Leo Andelin says he has been a fan of the frothy beer flower for ages and adds that his favourite
aphorism is “Lass Blumen sprechen”, let flowers talk. When Heineken closed the Tornio factory,
Andelin said that the Lapin Kulta flower was torn up from its homeland by the roots.
It’s time
to replant
the roots of
northern
beer.
Each investor gets
a memento of
their investment:
the investors’ names
are carved on
a wall of the
brewery under the
title “Restorers of
the Tornio Brewery
- we brought the
brewery back”.
THE FIVE INVESTOR LEVELS
GET VALUE ON YOUR INVESTMENT:
Level 1: 100€ - 2 shares
• Invitation to the general meeting
• Name added to the stainless steel “Restorers of Tornio Brewery” wall sign
• Tornio Brewery since 1873 -team shirt
Level 2: 500€ - 10 shares
• Invitation to the general meeting
• A free guided tour (once/year) of the brewery and distillery
• Tasting room (1 tasting event/year)
• Name added to the stainless steel “Restorers of Tornio Brewery” wall sign
• Tornio Brewery since 1873 -team shirt
Level 3: 3 000€ - 60 shares
• Invitation to the general meeting + VIP gala night
• Possibility to have private tours of the brewery and distillery
• Tasting room (1 tasting event/year)
• A free ticket to the Qstock event (1 ticket, 1 day)
• Name added to the stainless steel “Restorers of Tornio Brewery” wall sign
• 3 pcs Tornio Brewery since 1873 -team shirts
Right on, this is what we’ve been wanting to hear!
--- A comment on Sangen’s Facebook page on the
statement of intent between Sangen and Arctic Property
Level 4: 5 000€ - 100 shares
• Invitation to the general meeting + VIP gala night
• Possibility to have private tours of the brewery and distillery
• Tasting room (possibility to attend all tasting events)
• A free VIP ticket to the Qstock event (1 ticket, 2 days)
• Name added to the stainless steel “Restorers of Tornio Brewery” wall sign
• 10 pcs Tornio Brewery since 1873 -team shirts
Level 5: 10 000€ - 200 shares
• Invitation to the general meeting + VIP gala night
• Possibility to have private tours of the brewery and distillery
• Tasting room (possibility to attend all tasting events)
• Free VIP tickets to the Qstock event (2 tickets, 2 days)
• Possibility to invest in class A distillery or brewery shares (limited availability)
• Name added to the stainless steel “Restorers of Tornio Brewery” wall sign
• 10 pcs Tornio Brewery since 1873 -team shirts
CLASS
SINCE
1873
DISTRIBUTION OF SHARE ISSUE FUNDS:
THE SANGEN SHARE ISSUE STARTS ON 10 FEBRUARY 2016 AND
ENDS ON 30 MAY 2016.
The share issue is intended to raise EUR 1.5 million. Sangen will invest the raised funds as follows:
1
2
3
4
5
INCREASING THE CAPACITY OF TORNIO BREWERY TO OVER
1,500,000 L --> €1.0 MILLION. SANGEN OWNS 60% OF
THE COMPANY IN TORNIO.
AT LEAST EUR 200,000 IN THE DISTILLERY COMPANY.
SANGEN OWNS AT LEAST 60% OF THE DISTILLERY.
A TOTAL OF EUR 100,000 IN THE PRODUCT DEVELOPMENT COMPANY.
SANGEN OWNS 100% OF THE PRODUCT DEVELOPMENT COMPANY.
A TOTAL OF EUR 100,000 IN THE SANGEN SHOP PROJECT.
A TOTAL OF EUR 100,000 IN EXPORT ACTIVITIES.
SANGEN IN FIGURES
PRODUCTION QUANTITY (IN LITRES)
5 000 000
5 000 000
4 000 000
4 000 000
7350
6000
1 500 000
2000
200 000
2016
2017
2018
2019
2020
NET EARNINGS (EUR THOUSAND)
2950
2350
2500
2018
2020
10.6
7,4
4,6
4
2018
2019
12
2
2017
2017
6
210
2016
2016
8
1150
1000
850
10
1950
1500
0
DIVIDEND YIELD (%)
3000
2000
4750
4000
1 000 000
0
9700
10 000
2 400 000
2 000 000
500
12000
12 000
8000
3 000 000
0
REVENUE (EUR THOUSAND)
2019
2020
0
0
0
2016
2017
2018
2019
2020
INVESTOR FACTS
• International consumer habits favour microbreweries.
• Craft beer sales increased by 17% in the United States in 2013. Microbrewery sales pushed
past traditional Budweiser beer sales for the first time.
• Europe has followed in the footsteps of the development in the United States. The number of
European microbreweries has doubled in the past five years.
• In Finland, brewery operations largely rely on the three largest operators who produce a total
of 97% of all beer.
• Based on international consumer behaviour, Finnish microbreweries have significant prospects
for increasing their share from the current 3%. The future belongs to microbreweries!
• We are offering 30% of the capital stock of Sangen Ltd. Sangen Ltd. is the largest owner of Tornio
Brewery and funds the whole brewery investment. Sangen owns 60% of Tornio Brewery.
www.sangen.fi/anti
IF YOU NEED ADVICE, YOU CAN CONTACT US BY PHONE OR EMAIL.
YHTEYSTIEDOT:
ANTTI-PEKKA KERÄNEN
GSM 040 842 6928
[email protected]
MIKKO AHOKAS
GSM 040 502 5249
mikko.ahokas@sangen.fi
OUTI FORSTÉN
GSM 040 567 6730
[email protected]