Life as an evacuee and in a controlled economy

In 1939, the threat of war loomed. Orion transferred most of its operations to Keuruu, far away from the capital. There, a shutdown parquet factory was converted into a pill and ointment plant. Ampoule production was housed in a dairy. Containers were mostly washed outside, even when the temperature dropped to minus 40 ºC. As the situation seemed to have calmed down, operations returned to Helsinki, but the Winter War soon broke out, on 30 November 1939. Orion once again had to relocate its operations to the safety of Keuruu.

Before the war, Orion had stocked up on raw materials and could maintain its manufacturing programme virtually unchanged. Orion was the company that held the main responsibility for supplying pharmaceuticals in Finland, both on the frontlines and at home, because there were virtually no imports. During the Continuation War, Orion’s drug manufacturing operations remained based in Helsinki. In spite of a shortage of raw materials, production continued at a moderate rate.

After the war, Finland had a controlled economy. The value of currency declined and industry ran into difficulties. Wages and the prices of raw materials soared, but drug prices could not be raised due to the government’s stringent monetary policy. For instance, the wholesale price of liver had grown almost a hundredfold from its pre-war level, and the total wages paid by Orion rose by 44 per cent in a year even though staff had been cut slightly. The company faced stiff price regulation. Orion was in such dire straits that in 1947 its management even considered winding up operations.

Orion also had a reason to have a good look in the mirror. The company had enjoyed buoyant growth, but – in the words of Juhani Leikola – it continued to operate like a small enterprise. Erkki Leikola was Orion’s managing director, but also served as a Member of Parliament, the head of the institute of pharmacy and a university professor. Serious defects occurred in product manufacture, as a result of which pharmacists and physicians turned their backs on Orion for a while. However, the company survived the crisis by correcting the faults.

At the beginning of the 1950s, Orion boosted operational efficiency by mechanising production. This improved profitability. Times remained tough, however, because foreign competition increased and Finland’s money market was very tight.
The company had little working capital in hand – not enough to even purchase raw materials. Orion pruned the weakest performers from its manufacturing programme and once again improved its financial standing by issuing shares. Physicians and pharmacists subscribed for almost 70 per cent of the shares issued. Their confidence in the Finnish pharmaceutical company remained high, even though after the war some parties pressed for the nationalisation of the pharmaceutical industry and pharmacies.

To be on the safe side, Orion hived off all its non-pharmaceutical businesses to Regulus Oy, a  holding company set up in 1954 in case socialism gained ground in Finland. The position of the holding company was strengthened with an amendment to the Articles of Association in 1958. Orion’s competitor Medica also established a holding company – named Hesperus – as a safety measure. The threat was very real until as late as  the 1970s, when the so-called Pajula Committee proposed the nationalisation of major businesses, including the pharmaceutical industry and pharmacies.

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