Market development

The following changes in Componenta's business environment and in customer sectors are having an impact on our business operations:

Value chain management

As a result of the high level of consolidation in various industrial sectors in recent years, customer businesses have now become larger entities, which strengthens their purchasing power. Major customers with international operations require their suppliers to have the capacity and ability to make large deliveries. At the same time, customers are focusing increasingly on their own core business and outsourcing functions that lie outside this. This opens up opportunities for component suppliers to expand their value chain from purely component deliveries to product development and engineering functions and to offer full service applications.

Globalization

Componenta's net sales and profitability are impacted significantly by the prevailing competitive conditions and the state of the market. Customers for cast components are looking to obtain one-stop solutions from strong suppliers and in this way actively pass some of the risk down the value chain. The recession forced many smaller and medium-size cast component suppliers into debt rescheduling and bankruptcy. The changes in the foundry industry, the closure of foundries and acquisitions, are reducing the number of suppliers and are affecting market shares.

Consolidating purchases

During the recession customers aimed to improve their competitive standing by concentrating purchasing with fewer suppliers and by looking for new, more competitive suppliers. Their goal is to find strong, expert strategic partners who can survive even when market conditions are challenging and are able to continuously develop their operations as a supplier of complex cast components.

Developing partnerships

Customers today wish for more comprehensive solutions and are interested in joint R&D and engineering activities at their own business locations. When a customer business grows and expands its operations globally, it also requires suppliers that are its strategic partners to have an international presence and local operations close to the end customer. To obtain cost benefits for products and services it is often necessary to have operations in countries with low production costs, which in Europe means basically eastern Europe and Turkey.

Environmental impact

Restrictions on emissions are increasing and becoming stricter in more and more sectors and regions. Meeting these requirements is pushing up demand for alternative materials such as aluminium. The use of renewable energy is increasing, which is boosting investments in the technology needed to generate this energy and the construction of equipment.