Industry News

Bufab Group has reported that strong demand continued into the second quarter of 2021, with the company once again reaching an ‘all time high’ sales and operating profit. This positive development should be seen against the backdrop of solid market demand, but also challenging market conditions.

Jörgen Rosengren, president and CEO at Bufab, stated: “The strong demand that returned at the end of 2020 increased further during the second quarter in all business units and all markets. Our customers, who during mid-2020 had reduced production rates and forecasts, were in many cases taken by surprise by the strength of demand since the end of 2020. This in turn led to a strong increase in the production pace and forecasts, as well as very low inventory levels throughout the supply chain.”

Bufab net sales for Q2 2021 increased by 40% to SEK 1.431 billion (Q2 2020: SEK 1.022 billion). The strong demand resulted in a very good growth for the company as well.  Relative to the weak second quarter of 2020, organic growth was a full 44%, but the growth was also good relative 2019 and the first quarter of this year.

“The high demand does create difficulties, in the form of a very constrained supply chain and increased prices of raw materials and transportation. The supply chain for the global manufacturing industry (and especially in Europe and North America) has struggled with serious bottlenecks for raw materials, component manufacturing and transportation,” commented Jörgen Rosengren. “We have good insight into these problems due to our very broad customer base, which covers most geographies and industries. Bufab has never experienced a similar situation. These bottlenecks create uncertainty and additional work throughout the supply chain. Further, the imbalances in the supply chain have resulted in very strong price increases for raw materials and components, as well as even larger price increases for transportation.”

“Against this background, it is particularly gratifying that Bufab has succeeded in maintaining healthy deliveries, a stable gross margin and a very low cost level. The entire industry was impacted by production disruptions during the quarter, but very seldom due to Bufab. We have, as everyone else, been affected by large price increases for components since the end of 2020 but have so far succeeded in offsetting these with price increases to customers.”

During the autumn, Jörgen Rosengren will leave the CEO position after nearly ten years. The recruitment of a new president and CEO is proceeding as planned and is in its final stages. The board of directors has appointed Johan Lindqvist as acting CEO from 1^st September 2021 until the permanent CEO has taken office.