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Manufacturer Sans Frontières

Erik Gustafsson, Fortaco Wroclaw’s Sales Director, explains why running a hospital in Liberia is not so different than running a factory.

“I did it for the adventure,” says Fortaco Wroclaw’s Sales Director Erik Gustafsson of his decision to volunteer with Médecins Sans Frontières. “I don’t want to leave the impression I was doing it only to benefit humankind.” In 2008, Gustafsson served as logistics director for a hospital in Monrovia, Liberia, where he was responsible for all non-medical activities of a pediatric hospital, two clinics, and a cholera unit, all with a non-medical work force of 130.

While Médecins Sans Frontières, or Doctors Without Borders, is often thought of as doctors and nurses, it is, in reality, a major organization active in 70 countries with over 35,000 personnel.

Hospitals and welding factories

"Running a hospital and running a welding factory have many similarities," says Gustafsson. "I can’t treat patients and I can’t weld, but both require facilities and equipment. As a manager you've got to make sure money is used in the right way and make it possible for skilled people to do their jobs. You give people the tools they need and you track money and performance."

Gustafsson, one of three Swedes in the Fortaco organization, moved to Wrocław, Poland in 2009 when the factory operated under the Ruukki banner. His task was to move production for two Swedish factories that had closed production. But his boss resigned, and he ended up staying to run the sales department. And he’s been in Wrocław ever since.

The Wrocław factory’s history is long and colorful, but its modern incarnation began in 1999 as a brownfield investment, making bus chassis for Volvo city busses. It soon was producing for other customers, such as Kalmar, Atlas Copco, and Konecranes. Ruukki acquired it in 2005, and in 2012 it became a part of Fortaco. Today it employs close to 500 persons and occupies a 22,000 square-meter footprint.

Today’s factory

"Our job is to start with a steel plate and deliver partly-assembled, painted, and machined products,” says Gustafsson. “We're focused on complicated steel fabrications. Like mining machines. If it breaks down a kilometer below the earth's surface, then that's a problem. We're making unique investments in machining centers and robots, which help us differentiate by adding value." The steel plates eventually take the form of forklifts, reach stackers, harvesters, mining machines, structures for the energy sector, and straddle carriers.

Gustafsson’s vision is a future with more assembly. “Today, assembly is considered a core competency of the customer. But markets are growing and our customers need capacity. We believe assembly is not, in fact, our customer's core competence. If we do it, there are huge consolidation advantages. Since all customers use similar components, we can produce forklifts next to mining machines and do it with less overhead than OEMs, also focusing on sourcing and production processes."

Customers are gradually coming around to agree with him. Assembly is already started with one customer, and discussions are underway with others.

More with less

If Gustafsson says he can do something on the factory floor then we should be inclined to believe him. If there’s one thing he learned in Africa with Médecins Sans Frontières, it was how to be effective without unlimited resources.

He characterizes his children's hospital in Monrovia as "basic." The top three causes of death were malaria, diarrhea, and pneumonia. But despite these deaths, he did not find it to be a depressing environment. "Kids would come in with malaria and it was like they were in a coma. But two days later you're playing with them on the playground! The effect of the treatment is sometimes amazing.”

What Gustafsson learned in Africa he still puts to use in his daily work. In Médecins Sans Frontières we had HR, finance, specialists, maintenance, construction, and lots of equipment. The skills managing those neatly transfer. "No organization has unlimited resources, and Africa taught me you can do a lot with limited means."


Passionate to Push the Limits

Great things are accomplished with passion, and that passion is something, which can create great reflections around itself. At best, passions challenge us to develop persistence and commitment and help us to create our own, unique way to put ourselves out there in the world. Passions can also be very useful in a working life, since we can expand skills and mindset developed with passion to the way we work and solve problems.

Stanislav Bielak has put his whole heart, time, and mind into his passion. Being a professional welder & metalworker, Stanislav is also an active cycler, who continually competes in a beautiful landscape of Poland. Since 2017, he has taken a more serious approach to the sport, and been representing Janów Lubelski Bike Club, and taken immediately the third place in his first competition same year. The competition was organized by Cezary Zamana – a road cyclist, and the winner of Tour de Pologne 2003. After that, hunger for more has been gradually growing.

Share the support

The Bike Club is very active, and members organize rides on the roads, mountains, or forest areas around the year. Definitely, one of the best advantages has been an opportunity to meet new people, thinks Stanislav, and to be able to share the passion, and support each other in the face of success and challenges, in and outside the race. Support and assistance is important since everyone will encounter some obstacles and technical problems at some point in the course of competition.

In the beginning of 2020 Stanislav took part in the Biały Kruk winter race, and also the very demanding cycle of 12 MTB marathons Cyklokarpaty, organized from April to September. Routes are typically mountainous, and distances usually 30 - 50 kilometers. When riding just for recreation, Stanislav and his team mates can cover even 200 kilometer of routes.

Strength for challenges

There are some features, which are important when cycling in between mountains, through winding and dangerous roads, tens of kilometers. You want to be humble, have a great respect for the nature, and have a great technique to conquer roads safely and successfully.

Stanislav is taking a good care of his physics to ensure a smooth ride, but some routes can be really challenging. Like in the face of every challenge, it is important not to panic, but follow a plan created for these situations. For Stanislav, giving up is not an option. If any kind of breakdown happens, the most important is to pass the thought of not being able to carry on. In these kind of situations Stanislaw will slow down, drive at his own pace, and get some rest - and eventually, the strength will be restored.

Behind the passion is a dedicated team

Important qualities, valued in cycling, can be well adjusted to the way we would like to perform our daily work. Persistent attitude with a goal-oriented mindset will take you far and over obstacles in many cases. If you are well prepared, also for unavoidable challenges, and you see them as stepping stones to the success, and you are greatly committed to the journey, you will pass the finishing line.

A dedicated and supportive team behind the success is something not to be undervalued, neither in sports. The team must be able to see the set goal and offer the needed assurance. Stanislav’s family fully supports his passion and understands time and dedication to be needed to fulfill it. To see him to perform and witness the fun and pleasure cycling gives, is the source of boundless pride and joy for them.

Stanislav can clearly see cycling as a very important part of his future. He is excited and dedicated to improving and testing his physical and mental health, endurance, and limits. Every route cycled is a change to push limits even further and competing is definitely something he will put his heart on also in the future.

We wish Stanislav successful and safety rides and many years to come with his passion.


Investments at Fortaco Narva factory

Beginning of summer, we started a demolition project of a huge old-time useless building in front of our factory. Along with a new, large parking lot, which will be located in the area of old building, we are welcoming our employees, customers, and all stakeholders to visit our factory. In addition to the new parking area, the demolition project will improve safety in surroundings. Also, the outlook of Narva city center will be improved.

In addition, we have good news in regard to investments in machinery. This year and beginning of next year, we will have five (5) different new machines: two CNC Correa machining centers, two bending presses of 200 t and 150 t and one laser cutting centre.

It is very hard to overestimate the importance of these investments in the current environment. With the new machines we will create additional capacity in prefabrication and final machining, which will increase total throughput, and secure our operations, and our customers' supply chain.

With these good news, we wish a good start for the autumn and businesses - and welcome you to visit Narva.

Below the main specification of new equipment.

2 CNC Correa machines - Norma MG
Dimensions: 700 x 850 cm; X: 3,5m Y: 1,5 m Z: 1,25m

2 bending presses of 200 t and 150 t - Beyeler Xpert
Bending table length 3,1 m

Laser cutting centre - Bystronic Bystar
Max. power 4400 w, laser medium CO2, transmitted wave length 10600 nm,
beam diameter 20 mm, polarization: circular, maximum sheet dimensions 4000 x 2000 mm,
material thickness 20 mm steel, 12 mm aluminum, 3 mm copper


Lars Hellberg

Summer Greetings

Dear customers, business partners and the Fortaco team,

The first half of 2021 has been an extraordinary busy time period. Our order intake is record high, and we can still see +50% growth in order intake, which will contribute to record high turnover in 2021. We are planning our activities around Fortaco Go Green by scrutinizing in-house sustainability strategy and related actions. We are listening to customers and the market, in regard to e-mobility, and fossil free steel of the future. We are digitalizing our operations to make them more simple and more efficient.

We still experience the Corona pandemic around us. Fortaco has managed the situation fairly good, our teams at factories have managed to secure operations with limited impacts. I appreciate the open and constructive dialogue with customers.

Endless commitment to safety

I am very pleased to see our employee’s endless commitment on safety. As we know, initially safety is to secure right equipment, however, the most important is the individual behavior and endless commitment: stop - think – act, on a continuous basis. We have moved from having several incidents per month to having several months without incident. This proves it is indeed possible to run with zero incidents in Fortaco Group. We have launched a Safety Handbook to present our safety strategy, as a reminder to all of us. The devil is in the details, we all know, an injury can happen in any minute - let us stay safe.

Master of Flexibility – critical success factor

Master of Flexibility (MoF) is a key strategic cornerstone for our success. We expect MoF to be a critical success factor for Fortaco for many years to come, because the possibilities for improvement are endless, and our customers’ requirements continuously change. Together with customers, we have reduced lead-time from several weeks to several days. We have also launched a Master of Flexibility Handbook, and our plan is to run an intensive in-house training in the second half of 2021.

Business Site Gruza in Serbia

Fortaco acquired a new Business Site in Serbia, which has been integrated with respect, simplicity and speed. New Business Site provides Fortaco and its’ customers with new capacity within steel fabrication and assembly business. As our key capabilities, we are currently manufacturing high-tech large winches. Our focus is to identify customers within Fortaco’s large customer portfolio, and generate additional business in a coming time period.

Have a great summer season

It is time for holidays. The first half has been hectic and excited, and the outlook for the second half is showing even more growth for many products and customers.

I would like to thank all of you for the strong commitment – together we will ‘Make Tomorrow Safer and Better’. Enjoy the summer with your nearest and friends. Stay safe, we will have a strong market ahead of us and orders going forward.

With best personal regards,

Lars Hellberg
President & CEO


Safety

Safety record at Fortaco - Business Site Sastamala achieved 1000 days

A new safety record has been achieved at Business Site Sastamala, 1000 days without a lost time injury. The last accident, with the lost time from work, happened in October 2018. Since then, a lot of things has been changed.

Several improvements and development ideas have been executed to achieve 1000 days without injuries. One important change has been to start using a safety observation tool. All workers have a possibility to report unsafe condition. The safety tool alone, does not impact on safety culture, but it has been enabling discussions around safety, and turned attention to small details, which can be done in a safer way. By this, the already existing commitment towards safety has been further improved and become even stronger on each level of organization.

Also, another impressive safety record has been achieved in Sastamala beginning of June, the Load & Hauling Assembly Department has been working for more than 3000 days without any lost time injury.

Great and impressive – congratulations to the team!


One thing in the world is certain – the summer season is here!

The last 18 months have represented lots of unpredictable happenings, both in the world and in business. The Covid-19 pandemic, as we all know, has been and still is a black swan, which came as an unwanted surprise and changed the world and the way we all live, interact, and do business.

Fortaco and our industry, amongst many others, was negatively impacted in 2020. With fast actions in the spring 2020 and onwards, the Fortaco team made a quick recovery securing the safety of our employees and deliveries in the difficult environment with a successful outcome. For more insights concerning year 2020, check out our Annual Report, which can be ordered from our web-page www.fortacogroup.com.

From decline to a clear growth trajectory

Subsequently in 2021, and despite the Covid-19 pandemic still present, the overall business outlook has changed, perhaps a bit surprisingly, from decline to a clear growth trajectory, which is further strengthened by ramping up additional business awards granted to us by our valued customers. Depending on the industry, the current level of demand is everything from high to low, and the constrained supply market, availability of people, and Covid-19 restrictions are adding a special flavor to the situation.

The ability to cope with uncertainties is one of the factors differentiating high quality companies from the rest. Our approach is “Master of Flexibility”, the Fortaco way of coping with volatility, enabling us and our stakeholders to be successful in different market environments. It entails an extensive focus on safety, delivery, and quality, added by a high level of flexibility, to address the changing needs. And all this in a collaborative spirit with our customers and supply chain.

We have set our bar higher

As a proof of our concept, our year to date delivery accuracy is >95% (note, measured strictly according to the first promise!) and lost time injury frequency is 2.0. Both already represent a solid performance, but we have set our bar higher. We aim for nothing less than 100% delivery accuracy. In terms of safety, our professional approach can be found from our fresh Safety Handbook. Our motto is clear: Go for Zero.

Green and sustainable future

During H1/2021 we have also been working with defining our approach on sustainability. We have several on-going initiatives addressing the global need to find new solutions, contributing positively to the greener and more sustainable future. We believe we have a good position to address the need to decarbonize the industry together with our customers. More info to come later on.

Second half of 2021 pointing towards more growth

As said, the marketplace is currently busy, and the demand outlook for H2/2021 is pointing towards more growth. Our May 2021 year to date financial performance shows further improvement towards our long-term target of delivering 7% EBITA over the cycles. At the same time, several factors, such as supply chain bottlenecks, increasing raw material costs, and people availability are causing issues to all companies in the industry. We need to continue addressing these issues as professionals, and we feel we are on the right track to secure the needed operational and financial performance in 2021.

I would like to thank our customers, suppliers, and the Fortaco-team of professionals. Have a great summer season – stay safe!

Kimmo Raunio
Senior Vice President & CFO


General manager

Two Journeys of Gruža

Aleksandar Djordjevic went from mergers and acquisitions to manufacturing. His factory went from making cannons to winches.

On March 19, 2021, Fortaco Gruža in Serbia was born from the acquisition of Rapp Zastava by the Fortaco Group.

What is now Fortaco Gruža may trace its history to October 1853, when Zastava Arms cast its first cannons and howitzers. Zastava would become a large holding company, its subsidiaries making military and hunting arms, as well as automobiles.

Zastava Machines would be created to provide parts and services to the auto-manufacturing subsidiary, and would be privatized in 2006 by Norwegian investors, who would convert the factory to produce deck equipment and winches for the marine industry.

A knack for the business

Aleksandar Djordjevic, Fortaco Gruža’s business site manager, entered the picture in the early 2000s, as Serbian companies were being privatized. Serbia’s privatization history began in 1990, but lack of legislation and other factors caused a decade-long delay before the process began in earnest.

Djordjevic represented Serbia’s privatization agency, overseeing the sale of companies, helping them restructure. “I noticed that I was providing advice to management teams that had been in place for 30 years,” he says. “I had no factory floor experience, but I had a knack for pinpointing important issues in their businesses. I thought I could be good at it.”

An opportunity arose for Djordjevic to move to China as the general manager of a Serbian-Chinese venture to galvanize steel. Eventually, the partnership dissolved and he found himself back in Serbia, this time running the M&A department at Société Générale. But he still longed for the factory.

Rapp Zastava

Zastava Machines was now Rapp Zastava, having been acquired by the Norwegian investors, Rapp Marine Group. The company needed help preparing a business plan to get grants from the state, and Djordjevic played that role. When the general manager of Rapp Zastava retired, the COO in Norway suggested Djordjevic for the job. “I had the skills which were needed at the time, like change management and financial analysis.” He took the job. Five years later Rapp Marine Group became part of Cargotec, whose policy was not to operate far-flung offices. Rapp Zastava was carved out of Rapp Marine Group and then sold to Fortaco in March 2021 by the Norwegian owners.

Expanding the footprint

What does Fortaco see in Gruža? Lars Hellberg, Fortaco Group's President and CEO, has remarked that the factory is aligned with Fortaco's strategy to be the leading partner to the off-highway and marine equipment industries. The acquisition, he's noted, “provides customers with increased value in steel fabrication and assemblies."

From the factory floor in Gruža, Djordjevic sees it as a great way for Fortaco to expand. “Cargotec is a large client of Fortaco. In my opinion, this acquisition allows Fortaco to expand its presence in a new market niche with known clients. By manufacturing winches, Fortaco now expands its footprint.”

It’s an acquisition that makes sense, even though Gruža’s business does differ in some key respects.

Fortaco Gruža operates a 10,000-square-meter modern factory and employs 150 employees, but it relies less on automation than other Fortaco plants. “There's really no such thing as a standardized winch,” says Djordjevic. “We do single pieces or small series manufacturing, where CNC equipment and automation are used less. It's a business where manual work still replaces modern equipment. And that’s also our competitive advantage."

Another difference is temperament. How do hot-blooded Serbians work with cool northern Europeans? "Countries like ours on the hot seas are accustomed to emotions and raised voices," laughs Djordjevic. "You can imagine how the Norwegians saw us – the loud bunch. And we saw them as too cold." But the two parties quickly learned to work together. "Bad news or criticism isn't meant to be taken personally. Because everyone wants the exact same thing: to have a positive impact."


Welding supervisor

Deep Roots In a Heavy Business

Fortaco’s Narva business site has a long history with various products and ownerships. It was established in 1947 and 2013 acquired by Fortaco Group. Business Site Narva is the biggest unit in Fortaco Group, manufacturing high quality steel fabrications for the off-highway equipment industry. Some of the employees have worked for the company a respectable time period, one of them being Nikolai Golubev, Welding Supervisor.

Mr. Golubev has worked at the factory for 47 years. Those decades are full of changes, growth, new products, machines, and also various scientific developments. He started as a mechanic at the mechanical assembly in a vacuum laboratory, at the time, when the plant was an industrial site for the various scientific developments of leading research institutes in the country (former USSR).

”It was an interesting time. We didn’t only work, but also studied, played sports and actively participated in the public life.” For several years Mr. Golubev was a member of the trade union committee, and the chairman of the workshop committee in the technical control department.

Years at the factory have not always been easy going – Mr. Golubev has definitely gone through both good and bad with the company. The huge reduction in the 90’ was dark time, also for those people who were able to keep their jobs. ”It was necessary to survive, and so we did - still, it is hard for me to remember that time”.

Values In Action

Our values define the way we work and solve problems at work and in personal life. Mr. Golubev knows well his values, and those are probably the ones, which have helped him and the team to manage harder times, and also grow during smoother sailing periods.

”What I truly appreciate in people are responsibility, integrity and the ability to quickly make right decisions, leading to the goal.” Those are the qualities, he aims to put into effect also at work. And this is probably why, he is leading the bottleneck areas these days. The team is ambitious. “When facing a challenge, people usually try to find solutions before heading off from work.”

Working in a leading position has provided him great tools to handle stressful situations at work, but also has taught him to pay great attention to find ways to release stress outside of work. Mental health is a forever important topic and cannot be underlined too much, especially during these days. Mr. Golubev has created a perfect recipe to take care of himself, he is relaxing at countryside with his wife, grow exotic vegetables, go fishing and hunt some mushrooms.

Merging For Future

Mr. Golubev is very optimistic about the process, which is laying ahead of everyone. The factory extension was built last year, and the team is excited about the new possibilities the extension will offer in the future. ”I believe that the merge of veteran experience, enthusiasm and knowledge of modern technology among young workers, combined with a thoughtful strategic leadership, are the key to success for the further development of our factory and its prosperity. I am absolutely confident about this!”


Emotional intelligence

Emotional Intelligence and the Bottom Line

I think highly of myself. I feel I have something to contribute. I am aware of the impact of my mood on others. I make rash decision when I am emotional. I perform well under pressure.

The way you react to statements like these shows a lot more than how you feel about yourself. The answers actually impact your company’s bottom line.

‘Covid opened our eyes’

“We’ve often talked about targets,” says Agnieszka Koziara, Fortaco’s Senior Vice President for People and HR. “But Covid opened our eyes about the fact that we need to be aware of what’s going on with our people. How’s the home situation? How’s the family?”

Koziara wasn’t thinking about the company’s bottom line. She was more concerned with the mental health of her colleagues. When she discussed the behavior she was witnessing with Lars Hellberg, Fortaco’s President and CEO. Hellberg suggested she get in touch with Dr. Margareta Sjölund, Founder and Chief Psychologist at EQ Europe, one of the pioneers in emotional intelligence.

More than hugging

Everyone is familiar with IQ – the intelligence quotient. In 1995, a bestselling book by psychologist Daniel Goleman popularized the idea of the EQ, or emotional quotient. “Research makes clear that EQ is not just about hugging people,” says Dr. Sjölund. “It’s directly related to performance. If you’re a leader who works on relationships, then your people feel appreciated, listened to, and respected. Through that you can motivate people to do their very best.”

Sjölund is quick to point out that the World Economic Forum lists EQ among the top skills employers are looking for. “How you relate to others is so basic to being human. Feelings drive behaviors. Behaviors affect your success.”

Not everyone, however, is good with feelings. But the good news is that EQ is not like IQ: EQ skills can be learned. EQ can be developed and improved.

Getting emotional

Fortaco decided to examine the emotional skills of its managers, and brought in a team from Sjölund’s company to help.

Fortaco’s top 25 managers were tested using the EQ-i2.0 inventory which measures emotional intelligence. The test measures 15 social/emotional competencies, including stress management, self-awareness, confidence, self-expression, and assertiveness. How'd the managers do, talking about themselves to strangers on a video call? “We were touched that people were so open,” says Birgitta Söderström, EQ Europe’s Senior Consultant and Master Trainer. “People shared in a courageous and vulnerable way.”

EQ-i2.0 scores subjects from 60 to 130, with scores below 90 and above 110 considered low and high, respectively. “Most important is the balance between the competencies,” says Söderström. “We look for gaps. If I’m high on empathy but low on assertiveness, what happens if I work to make this more balanced? How can it make me more effective?”

When you’re low on empathy

Scores were kept strictly confidential and not shared with management. “You’re the owner of your own results,” says Söderström. “You decide what to do with them.”

Generally speaking, Fortaco employees scored well in stress response, self-responsibility and self-awareness, with lower scores in in collaboration and empathy. “But this is completely natural,” says Agnieszka Koziara, “because people aren’t seeing each other anymore. Turn off the camera and we’re even farther from each other. Camaraderie, the team, the ‘we’ — these were weak.”

What’s the solution to improve weak areas in the time of Corona? “More camera is one,” says Koziara. “Seeing each other’s faces is important. Because of connection speed issues, we used to have meetings without the camera, but now we always turn it on.”

"We've got to consciously focus on having time together, since it doesn’t happen by the coffee machine anymore," she says. "We've got to create a virtual coffee machine.”

Profit and performance

Creating a virtual coffee machine to boost EQ scores has implications that go well beyond the world of psychology. The results achieved by Fortune 500 companies speak for themselves.

At PepsiCo, for example, executives with high EQ competencies generated 10 percent more productivity with 87 percent less turnover. In computer programming, research shows that the top 10 percent of EQ performers beat average performers in producing effective programs by 320 percent. Superstars, those in the top one percent, produced twelve times better than average

In manufacturing, research has shown that when supervisors are trained in emotional competencies like listening and helping employees resolve problems on their own, key performance indicators improve. In one company, lost-time accidents were reduced 50 percent, formal grievances were reduced from an average of 15 per year to three, and the plant exceeded its productivity goal.

Fortaco results

What should Fortaco expect? “What Fortaco is attempting to do is improve their culture,” says Sjölund. “We’re starting with the leaders, and we’re looking for it to trickle down, creating a successful organization with happy customers. How do you get happy customers? Through efficient and happy employees. This is only part of what you get with EQ-savvy leaders.”

Improving the bottom line was never one of Agnieszka Koziara’s goals when she began the current EQ project. If that happens, it will be an added bonus. For the moment, she’s putting into play what’s been learned and looking beyond Corona. “We’ve had some deep conversations. We’ve learned we can do more via video than we previously thought. And once Covid is over there will again be meetings. We’ll hug and drink wine. People are a lot like plants in the desert. We can learn to grow if we want.”

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Want to learn more? Read Emotional Intelligence: Why It Can Matter More Than IQ by Daniel Goleman (Bantam Books, 1995). And forthcoming in autumn 2021 is EQ in Action by Dr. Margareta Sjölund (Black Card Publishing).


Enjoy the Holidays

Fortaco Team is wishing everyone relaxing and peaceful Easter holidays.
We hope your days will be filled with great spring spirit, and something you dearly value.