Ola Tengroth, President of Lesjöfors, and Kjell-Arne Lindbäck about 2019:
“A tougher year than expected“
A year with weak growth, but also a new acquisition and a change of President. After 23 years as CEO of Lesjöfors, Kjell-Arne Lindbäck has retired and been succeeded by Ola Tengroth. Ola stresses the importance of developing the strengths and excellent operations that Lesjöfors already has.
First things first, Ola – tell us a little bit about yourself
Ola: I started as a mechanical engineer, but I also have a master’s degree in business administration from the Gothenburg School of Business, Economics and Law. I started my career in the engineering industry, but have now held several managerial roles in the chemical industry. As a manager and President, I consider myself to be a down-to-earth person who enjoys the practical side of business – doing business simply and directly, without formalities.
What attracted you to Lesjöfors?
Ola: The company’s long-term approach and the fact that it is a strong, well-managed company with an interesting development. The culture also attracted me with its decentralized management model. I believe in delegating responsibility because that type of management often leads to fantastic results. On a personal level, I’m also excited to return to the engineering industry.
Can you summarize the developments in Industry during 2019?
Kjell-Arne: 2019 was a tougher year than we expected. The year started strong in several markets, but then a certain amount of slowdown followed. The exceptions were Germany and Asia, where a downturn in the automotive industry prevailed for the entire year. This industry is in transition, and the move to electric vehicles seems to be hindering the level of activity in traditional manufacturing. Demand in Germany has fallen relatively sharply as a result, making it necessary for us to take decisive measures. Our position in the Nordic region is strong overall, and we have several new projects to compensate for the downturn in the automotive market.
Chassis Springs has declined – can you explain why?
Kjell-Arne: The operations are seasonal and can also vary from year to year, depending on factors like how harsh the winters are. It’s important to remember that 2017 and 2018 were record-breaking years. Demand decreased in 2019 and it will take a little time before we’re back to normal levels. But when demand recovers, I’m confident that we’ll come out winners. I’m also confident that we can capture market shares thanks to the measures we’ve taken and the economies of scale we’ve achieved in the operations.
Ola: There’s nothing to indicate that we have lost ground in 2019, which is important. My understanding is also that Lesjöfors is ahead of the competition when it comes to managing fluctuations in its operations. We’re quick to act and continuously monitor trends and make the right cost adjustments at the right time.
Another acquisition was carried out in 2019 – how has this strengthened Lesjöfors?
Kjell-Arne: The Dutch company Spibelt meets each of our criteria for a good acquisition. It has a broad range of customers and items and brings us into a new niche: conveyor belt applications. This acquisition was exceeded our expectations and strengthens our position in Central Europe.
Why are acquisitions important and what is the goal moving forward?
Kjell-Arne: This has been incredibly important for Lesjöfors, with our global position and network. We’ve also established trust with our customers, who know that we can offer them a broad range of products anywhere in the world.
Ola: And this is a journey we will continue. In parallel with investments in organic growth, we have a healthy appetite for new acquisitions and several are already on the drawing board. We will nonetheless be selective in this work so we can find operations that fit seamlessly into our portfolio.
Kjell-Arne, you’re leaving after more than 20 years as President – which accomplishments are you most satisfied with?
Kjell-Arne: That we could develop our proprietary products in Industry and Chassis Springs, products developed by our talented employees at Lesjöfors. Also the fact that we acquired several fantastic companies that have helped us to become global.
Ola – what will be the company’s main focus in 2020?
Ola: Developing the strengths and excellent operations that Lesjöfors already has. A number of tangible measures are also needed due to the weak growth in certain parts of the operations. We need to be driven and get things done.