Ruukki group increasing ownership in furniture business
07/02/2007 - 17:42
Ruukki Group will increase its ownership interest
in Incap Furniture Ltd from 47.1 % to approximately 70.3 %
through a directed share issue.
This ongoing transaction will in part continue Ruukki
Group’s strategy to invest in wood-based product areas and
in Russia. Due to demanding situation at Incap Furniture
sharper owner’s leadership role was thought to be vital, and
therefore Ruukki Group decided to carry out the agreed
restructuring.
Incap Furniture Ltd currently produces wooden furniture and
wood-based combi products mainly delivered to export
markets. According to preliminary financial statements,
Incap Furniture Ltd consolidated revenue in fiscal year 2006
amounted to 47 million euros, and respectively, EBIT was
approximately –5 million euros. The interest-bearing debt
totalled some 21 million euros at the year-end. The heavy
losses in 2006 have been caused mainly by increasing raw
material prices, by changes in product range as well as by
inefficiency in production. Moreover, during 2006 there were
additional one-off costs related to site closedowns and
employee layoffs.
During the current year the profitability of furniture
production is targeted to increase through new product
introductions and new customers, of which LEGO is
considerable, and by productivity gains. The measures
carried out in 2006, e.g. closures of factories, will be
shown in 2007 profitability.
Ruukki Group will develop raw material purchase processes,
and possibly start furniture component production in
Russia.
Furthermore, Incap Furniture has signed a letter of intent
with Stora Enso Timber related to planned glued board
production in Impilahti in Russia.
Ruukki Group will consolidate Incap Furniture as a group
company presumably from March 2007 onwards. This is
estimated to increase 2007 Ruukki Group’s consolidated
revenue by roughly 60 – 70 million euros.
The business climate is presumed to be challenging in the
future, but the done and started restructuring provide a
good basis for further operations.
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