Doing Business : ‘Twentysomethings’ Take the Wheel of Estonian Capitalism : Meet Nils Niimann, 21, and friends. They’re into car dealerships, juice imports and water purification. And those are just a few of their ventures.
As soon as he sees the sleek maroon Subaru with retractable headlights and quadraphonic sound system, Nils Niimann forgets all about the contract he’s supposed to be negotiating.
Jumping into the driver’s seat of the showroom model, he spins the steering wheel under his beefy palms, whipping around an imaginary racetrack. He flicks on the headlights, fiddles with the radio, checks his spiky blond hair in the mirror.
After he’s done fantasizing, Niimann climbs out of the car and gets back to business, arranging for Subaru mechanics to repair the Chrysler cars that he and his partners are planning to import to this former Soviet republic, now a proudly independent state.
With his overgrown brush cut, prominent ears and purple shirt buttoned to the neck, Niimann looks like a cross between Jughead and Bart Simpson. His boyish enthusiasm for high-tech gadgets adds to the image.
But the 21-year-old Niimann is actually a serious, successful and respected businessman. He represents a new generation of Estonian entrepreneurs--a twentysomething crowd of fledgling capitalists who are determined to drag their country into the world economy and pocket hefty profits along the way.
“For the future of our country, there must be more young--or really, I should say, more sane--people doing business,” commented Priit Rebane, 25, one of Niimann’s partners. Now sprawled on the couch back in his cluttered office, Niimann nodded his assent.
Rebane, his younger brother and Niimann teamed up last year to found the BaltiAuto Co., which they hope will become the region’s first authorized Chrysler dealership. For start-up capital, they turned to Alas-Eweco, a profitable holding company founded in 1989 by Niimann’s father and one of the first private enterprises formed here after Soviet laws were liberalized to allow such ventures.
Besides selling Jeep Cherokees--vehicles they think will be ideally suited to Estonia’s ragged, Soviet-built roads while at the same time offering the cachet of a “Made in the U.S.A.” label--the young capitalists have half a dozen other ventures in the works, from importing Florida orange juice to setting up a water purification plant in Tallinn.
The peach-fuzz beards and unlined faces of Estonia’s new businessmen would seem startlingly young in many American boardrooms. But throughout the former Communist Bloc, it is Niimann’s generation--the children of perestroika --who have led the charge toward capitalism.
In Russia, such young go-getters tend to focus on making a fast buck rather than investing in the future. Although their wheeling and dealing generates personal wealth, many of them are unconvinced that they will be able to lead the sprawling, divided country to prosperity.
In contrast, young Estonians seem boundlessly optimistic about their small nation--and confident that their individual business deals can make a difference.
With Russia and the other former Soviet republics to the east, and the Baltic Sea, Gulf of Finland and Europe to the west, Estonia offers a gateway to two vast markets.
Its boosters even tout Estonia’s smallness--a population of 1.6 million and territory barely equal to Massachusetts and New Hampshire put together--as an advantage. They predict reforms will spread more rapidly in their compact nation than in giant, unwieldy Russia.
The Alas-Eweco company, which gave Niimann and the Rebane brothers their start, proclaims as its mottos: “To work for and with the Estonian Republic” and “To give a small nation a chance to be great through promoting culture.”
Backing up its rhetoric with investments, Alas-Eweco has sponsored the Estonian Olympic team and dozens of cultural groups.
And in an effort to stimulate Estonia’s economy, the firm has entered a joint project to mine granite with the Ministry of Natural Resources. Also under way: plans to build a factory that will produce liquid coagulant to purify Tallinn’s drinking water.
With 16 subsidiaries, including Estonia’s first private outpatient medical clinic, Alas-Eweco recorded net profit of $2 million last year on sales of $11 million, Chief Executive Officer Toomas Niimann, Nils’ father, said.
Most of the subsidiaries are managed by college-age students.
“The socialist mentality is so ingrained in the older generation that 98% can’t imagine at all what a market economy is like,” said Toomas Niimann, 54, who wears a ten-gallon cowboy hat atop his graying head. “Our only hope is that our young people will lead society onward.”
Niimann and the Rebanes refused to discuss their incomes. But their lifestyles, while far from ostentatious, hint at a comfortable nest egg.
Niimann drives a top-of-the-line Chrysler Jeep, equipped with remote-control locks, a German car phone and an American radar detector--which somehow fails to warn him of a speed trap that catches him zooming through a residential area at 53 m.p.h.
The Rebane brothers’ car is a more modest Volkswagen, and like Niimann they still share an apartment with their parents. But the young men also enjoy their share of luxuries. Their vacation last summer included stops in half a dozen U.S. cities, Canada and Mexico.
During the nearly 50 years of Soviet rule that followed Stalin’s annexation of the Baltic states in 1940, such a life would have been unimaginable.
The majority of bright teen-agers followed a predictable path: study at a state university, earn a degree in engineering or science, work for a government-run institute.
If they were lucky, membership in the Communist Party vaulted them to a managerial position, where they enjoyed perks like secretaries who would wait in food lines for them. But they had little chance to express creativity, earn better-than-average salaries or switch jobs.
Now, all that has changed.
At 22, Eveli Ulla earns 1,000 kroons ($87) a month--more than her mother and father combined--as manager of Pariisi Vesi Ltd., an Alas-Eweco subsidiary that imports designer-label perfumes from France. And while her parents, a geologist and an engineer, feel trapped in their jobs at soon-to-be-defunct state enterprises, Ulla senses infinite opportunities. She said she has learned more in five months on the job than in three years at Tallinn Technical Institute.
Niimann and the Rebane brothers seek out new projects with a zeal bordering on hyperactivity, confident that their business acumen will bring success, almost regardless of the venture.
On a typical Tuesday, Priit Rebane’s agenda included calling European contacts to find a buyer for Russian coal and scrap metal; pursuing a deal with a Japanese firm for water purification technology; checking out local wholesale prices for orange juice to test the profitability of importing frozen concentrate from Florida, and negotiating with the Tallinn Business Center to advertise the soon-to-be-completed Chrysler showroom.
He rejected a logo for his business cards and the BaltiAuto stationery designed by a professional graphic artist. “I’ll do it better myself,” he said matter-of-factly.
It sounded like the credo of his generation.
Despite their determination, Estonia’s youthful, would-be magnates have encountered serious obstacles. Construction has begun on their Chrysler showroom, and they have already sold three Jeeps shipped in from Finland. But they cannot set up an authorized Chrysler dealership until they are able to line up a half-million-dollar letter of credit from an American bank to purchase their first 10 vehicles, according to Peeter Rebane, a Harvard University sophomore who juggles undergraduate courses in Cambridge, Mass., with cross-country trips to hunt for potential investors.
“If investors are familiar with the Eastern European scene, they may actually trust young people more,” Peeter said in a telephone interview. “But traditional, conservative American businessmen don’t trust youth.” The younger Rebane is “basically 19” and notes, “There’s not a lot I can do about that.”
The Rebanes have found the computer business more open to youth. During a trip to California last year, they struck a deal with Integrated Micro-Technology Corp. in City of Industry. So far, they’ve bought about 45 IBM-compatible desktop computers at wholesale prices, shipped them to Estonia and resold them at a small profit in Tallinn.
