Sweden – European fastener market insight
Get an insight from our CEO Jörgen Rosengren, through Fastener + Fixing Magazine article about the Fastener Business from a Swedish perspective. The magazine has done a series of articles, inviting leading fastener businesses, from all European countries, for an insight into the prospects and challenges of their domestic markets.
“Since its foundation in Sweden 40 years ago, the Bufab Group has grown into a preferred partner to the manufacturing industry worldwide. We offer full service solutions in C-Parts sourcing, quality assurance, and logistics, and have 1,300 ‘Solutionist’ team members in 43 subsidiaries in 27 countries in Europe, North America and Asia.
We pair this global reach and our coherent ‘Digital Best Practice’ platform with strong local presence and entrepreneurship: A tribute to the down to earth family company feeling that has been a Bufab hallmark since the outset.
In the past five years, we have achieved very good growth (over 15% per year, every year) and improved our margins despite volatile demand in raw material and currency markets. Even more importantly, we have strengthened our customer relations and our supplier base, and we have invested heavily in our team, processes and tools. At the end of each year, we ask ourselves: ‘Are we a stronger partner to our customers now than a year ago?’ And so far, the answer is ‘yes’ .
This does not come without challenges. We have both global and local demand uncertainties, most recently the fear of trade war and a worry amongst our customers that growth is slowing down. We are of course dependent on our customers’ demand and need to adjust to that. However, as we work very hard to become the most relevant supply chain partner, we strive to offset any weakening in industrial demand with new business growth.
Also, both raw material and currency markets have been quite volatile recently. In Bufab’s case, the increase in material cost in 2017 – 2018 and the weakening of the Swedish currency in the same time period have of course posed a challenge. However, our experience is that with an honest and open approach to customers, we are generally able to pass on such cost increases not of our making, in the form of price increases. The customers know they gain it back, many times, in productivity gains by not having to do the sourcing, quality and logistics work themselves, and instead being able to focus on their core business.
Generally, customers are also much more demanding today than a few years ago. We like that! Our efforts mirror the issues and challenges our customers face – reducing complexity, streamlining supplier bases, improving quality and delivery performance.
Recently, we have invested in a new generation of logistics solutions and launched a cloud service – EasyTrack™. It provides the customer global, multichannel access to a transparent overview of racks, bins, refilling, order status, delivery performance, drawings and more. Thanks to our global, coherent digital platform, we are also working with customers to find new ways for them to capitalise on their own unique data in order to drive productivity.
Increasingly, also, customers’ need to ensure sustainability and corporate social responsibility, throughout their supply chain, is a reason for them to turn to Bufab. In this area, C-parts are especially challenging. Only players whose core business it is to ensure the sustainability of a wide variety of parts, to many suppliers worldwide, can give the necessary guarantees. Bufab has an EcoVadis Silver Medal ranking, and our aim is to be in the top 5% of sustainability companies in 2020.
In order to strengthen our relevance to customers, we are always on the lookout for new companies to join the Bufab family. Over the years, about 50 companies have chosen Bufab as a haven where they can continue their strong development in entrepreneurial freedom – yet gain access to a global platform and skill base. In the recent past, we have acquired for instance the Rudhäll Group in Sweden, Kian Soon in Singapore, and HT Bendix in Denmark. These new ‘sister companies’ bring skills and assets, which further strengthen Bufab.
As for the outlook for the rest of 2019 and beyond, we see an uncertain demand picture ahead. However, in such times, increasing productivity, flexible supply, and perfect quality, become even more important. Plus, in the face of environmental, political and social challenges, concrete sustainability actions are needed. That’s why we keep investing in our Leadership 2020 strategy: To be the leading company in our industry, next year, no matter what the market does”.
Jörgen Rosengren, CEO