Milestone in Narva industrial development – new factory launched

“This was a project, which was really big – maybe it turns out to be the biggest project in my life”.

A factory extension project was kicked-off in 2015, when we first time started to foresee an overload of new project implementations, and lack of space, as well as capacity constraints. Many actions were connected to operational excellence allowing us to accommodate additional work into the company up to +100%. 30 revisions of a business plan were executed before the final approval.

Mid 2017, when we celebrated a 70 year anniversary of Fortaco Estonia, we officially announced the start of the extension project. This will be an investment of 10.000 m2 in factory floor as well as investments in several welding robots, CNC machines and bending capacity, in total 10 MEUR. The extension project was supported by the Estonian government with the amount of approx. 1 MEUR.

Before autumn 2017 old buildings were demolished, and we started technical design for a new production hall. After extensive technical and commercial preparations a construction work was started by a contractor, Rand and Tuulberg, during summer 2019. We assigned Andrey Ponomarev from Fortaco Estonia as Project Manager. Andrey was doing excellent job in cooperation with all stakeholders. Thanks to all dedicated work done by the project team, partners, Fortaco Estonia Leadership Team, we managed to finish construction work successfully in August 2020 – according to time schedule.

”This was the biggest project I have participated from a concept and design stage, and I think this was like a fresh wave for us in our daily routine jobs. There were some challenges during the project, but all of them have been analyzed and worked through for a next similar project. The most memorable moments are in the beginning and at the end of construction; I was participating in project documentation and development for two years before the real construction work was started, and it was nice to see the factory layout starting to be realized with equipment installation” – Andrey Ponomarev.

In 2020 Fortaco Estonia was awarded by the Estonian government as the best company for its’ contribution to the regional development of Narva, Ida-Virumaa county. In 2019 Fortaco Estonia was awarded as the best company of Narva city for the result.

I would like to thank all who contributed to this successful project. I am happy that Fortaco Estonia will now have wider possibilities to boost new business implementation and support customers’ supply chain strategies. I am also very glad that our employees will get working conditions with advanced technologies to develop their skills.

I am sure, this will be a great continuation on our road to success.

Larissa Shabunova
Managing Director
Fortaco Estonia


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Factory

Everyone has a role – pay attention to safety

We are wishing all our business partners a safe restart of operations after the summer break.

The increase of COVID-19 cases in many EU countries reminds us to continue paying attention to safety measures. Everyone has a role in this. It is important to continue maintaining physical distancing, respiratory etiquette, and good hand hygiene. People with symptoms, compatible with COVID-19, should stay at home and contact their health care providers.

Fortaco is committed to safety of our employees, and we continue our manufacturing operations. We keep our operations safe by the measures introduced already earlier this year. We have decided to continue with the restrictions regarding travelling, personal contacts at our factories, and remind about the responsibility concerning all of us to keep this situation under control.

Let us stay safe!


Safe and Sound Summer Greetings

Looking back to the end of 2019, no one could predict such a turn, which happened during the first half of 2020. After optimistic 2018 and more realistic 2019, business environment was expected to continue in 2020 the same general trend as 2019. End 2019 the signals coming from China were not understood as a foretaste of an economical earthquake.

Standing now at the end of the second quarter, we can say it was a very unusual period. Entering year 2020, Fortaco felt some optimism as regards to the market growth. Our experiences from 2019, and customers’ forecasts for 2020 built a perception of stabilization. However, a quickly spreading Corona virus changed the business environment and rapidly introduced a new reality.

During the first quarter, Fortaco factories continued with the normal production output, deliveries were not interrupted. Shortage of components from China did not impact our operations. However, the rapidly rising number of infection cases as from end Q1, and quickly spreading virus through Europe, forced most of the economies in the old continent to implement various tools for temporary lockdown, which did not left Fortaco intact.

The overall slow-down on the market influenced us mainly through the situation at end-customers. Due to the governmental regulations, issues in supply chain, and protecting of employees’ health, the most customers implemented security measures and temporary closed their operations. All this had a strong correlation with Fortaco’s operations and our production and delivery plans. Luckily, from a supply chain perspective, Fortaco did not suffer from any major shortages which could have seriously impacted our customer supplies. Thanks to common understanding, good collaboration with suppliers and partnership approach, Fortaco has managed to secure the flow of parts and modules to our customers as well as for aftermarket.

The second half of the year remains to be a big question mark. Our customers’ forecasts follow the general trend in the industry. At Fortaco, we are preparing ourselves already now for the quick reaction once volumes return. We believe, the market situation caused by the pandemic will give new opportunities for those, who are ready in proper time to support customers quickly and agile way. We Trust in Tomorrow.

I am wishing all of you safe and healthy holidays. Enjoy the summer with your families and friends, getting ready for challenges in the second half of 2020.

 

With best regards,
Krzysztof Michel
Senior Vice President,

Fortaco Sourcing & IT


Time for Vacation

Dear customers, business partners and Fortaco team,

The Corona crisis is still reality for all people around the globe. Countries are using their best knowledge and experience to reduce and eliminate the crisis. We are all impacted, harder or softer. Most probably, we will experience a new normal when Covid-19 is a new illness in our global society.

Since the beginning of March, Fortaco has taken serious actions to safeguard our employees, customers and business partners, and to keep our deliveries as promised to our customers. I am very honored to see a strong commitment by everybody involved in the complex supply chain, including the Fortaco team. Despite of somewhat declined net sales 2020 year-to-date, we have taken extraordinary actions and improved profitability. We have also strengthened our liquidity in case it is needed going forward.

New Chairman of the Board
Mr. Panu Routila has been appointed the Chairman of Fortaco Group Board of Directors as from May 2020. Mr. Routila has served as President & CEO at Konecranes and Ahlström Capital. Mr. Peter Augustsson has successfully chaired Fortaco Group since company’s establishment 2013.

Factory extension in Narva
Fortaco’s strategic investment in Narva, a new factory of 10.000 m2, is proceeding exactly according to the plan. Operational take over takes place in coming days. More information to be released after summer.

Make Tomorrow Safer and Better
Fortaco’s operational focus is on safety, quality, delivery performance and productivity, according to our strategic approach “Make Tomorrow Safer and Better”. By continuous development we have successfully been improving our performance.

Outlook for autumn
Fortaco is perceiving the outlook for autumn to large extent unknown. The Corona crisis is still alive with the releases of restrictions, depending on country and specific situations. We have updated our scenario plans for autumn to be prepared, varying from a slight optimistic to a less optimistic, equal to the second quarter net sales.

As of beginning of August, we are going to allow visitors at our Business Sites; changes might occur, depending on Covid-19 development. Since the beginning of March, our approach is “no panic”, we are managing our operations professionally day by day – and this is still valid.

I would like to thank you for your trust, and I am wishing all of you a nice summer period. Stay safe and healthy!


With best regards,

Lars Hellberg
President & CEO