Staffan Johansson, President of Beijer Tech, about 2019:
“A record year for Beijer Tech“
Most of Beijer Tech’s operations exceeded the goals established for 2019, allowing the company to deliver a record result for the year. The company benefited from the strong Swedish industrial economy as well as the recovery in offshore in Norway.
Summarize your performance in 2019.
We reported relative volume growth and captured market shares – for example, in Lundgrens and in Norway and Denmark. Svebab also delivered a strong performance. At the same time, we were able to keep costs down, which contributed to this positive trend. Beijer Tech works in a decentralized manner. This gives local managers considerable individual responsibility in terms of developing business expertise.
Industrial Products has made a turnaround in recent years – how would you describe the business area’s performance in 2019?
As already mentioned, Denmark and Norway stand out. In Norway, the offshore market made a comeback after a few weak years, which boosted demand for Norspray’s services. In Denmark, we have an incredibly skilled sales organization, which is a key reason for the excellent performance there.
You have carried out several acquisitions – can you describe the background for these transactions?
It has been intensive and the acquisitions were all well implemented. I also think it’s important want to mention our decentralized work approach. It means that new business acquisitions don’t drain as much energy at a central level, but can be integrated in a convenient and efficient manner.
In Fluid Technology, our goal is to intensify our internationalization and the purchase of Codan should be viewed in this light. The Norwegian market is a good fit geographically and strategically, and can largely be supplied from Lundgrens’s central warehouse in Gothenburg. The acquisition in Finland provides us with a larger critical mass, thereby creating new opportunities to earn money, attract new employees and increase growth. New areas have also been added to Beijer Tech through the acquisition of Encitech. This acquisition reflects our aim to serve as a broad platform for well-managed companies in industrial manufacturing and trading.
What are your requirements for acquisitions – where does value creation come into the picture?
All companies must have a long-term sustainable business with growth potential. They should not be dependent on only a few customers. A third requirement is that the companies offer high customer value, which supports a strong customer relationship. One example of customer value in the existing operations is the high availability and delivery reliability that our companies offer. Our customers know that we have the products they need on hand and that their production will not stop because they can receive fast deliveries from us.
A high level of competence is another requirement, which we also have in our companies. Many employees have been part of the operations and the industry for a long time. This provides continuity for the customers, who get to know our employees and feel they receive fast and helpful responses to their inquiries.
What is the status of your plans to increase the amount of manufacturing and refinement in the company?
We are on a journey toward higher value creation, and we are looking for acquisitions with manufacturing and refinement capabilities. This journey continued in 2019 with the acquisitions of Encitech and KTT Tekniikka. During the spring, we completed the new plant in Tyresö, outside Stockholm, where Lundgrens and Packningar & Plast were integrated and we manufacture such products as gaskets and seals. Investments were also made in a new machinery and we have recruited new employees with cutting-edge expertise in manufacturing. These are the same measures that were implemented earlier at Svebab and which gave production there a boost. Both cases involve a shift in manufacturing expertise, meaning that we can accept additional and more advanced orders.
What will your focus be for 2020?
It will be important to have a strong sales focus because we can see that demand is slowing down. We are also making investments in digitization. This will allow us to simplify our procedures for everything from inventory to sales, enabling us to serve our customers even better. We are also advancing our positions in e-commerce, where industrial trading is lagging behind the consumer market in terms of speed and simplicity. In this area, we are focusing on solutions that will cut delivery times, for example. We will also continue to actively seek out new acquisitions with the potential to broaden and complement Beijer Tech’s operations.