Finnish cargo handling solutions provider Cargotec has said that it will refocus its strategic direction, as it looks to exit Kalmar’s heavy port cranes business. The company is evaluating strategic options, including a possible sale of its MacGregor maritime cargo and load handling business.
“Going forward, Kalmar will offer industry shaping, eco-efficient cargo handling equipment and lifecycle services in the mobile equipment product categories, straddle and shuttle carriers as well as Bromma spreaders,” the company said in a statement.
As for MacGregor, Cargotec said it will evaluate the whole business area, inclusive of its merchant, offshore and services businesses.
Cargotec and Konecranes recently pulled the plug on a planned merger after the UK Competition and Markets Authority blocked the deal, and Cargotec said it is now moving to focus on sustainability and growth in profitable core businesses.
The company said it would review its operational model to support the refocussed group. Its capital allocation priorities for upcoming 12 months will be towards accelerating investments in its climate programme, mergers and acquisitions, and research and development in electrification, robotics and digitisation.
Cargotec added that it will in the future focus on sustainability and growth in profitable core businesses Hiab, Kalmar Mobile Solutions and Kalmar’s horizontal transportation business. Cargotec’s strategy will be based on Hiab, which provides on-road load handling equipment.
“Hiab’s business portfolio will remain the same, but Cargotec plans to further accelerate the development of Hiab’s mergers and acquisitions (M&A) pipeline,” the Helsinki-based firm said.
Based on 2021 figures, Cargotec said its core businesses—Hiab, Kalmar Mobile Solutions and Kalmar’s horizontal transportation business—would have had sales of 2.6 billion euros (US$2.87 billion) representing approximately 80% of Cargotec’s total sales.
The non-core Kalmar heavy port cranes and MacGregor businesses together registered sales of EUR650 million in 2021.
Cargotec said the new strategic direction won’t impact its outlook, expecting comparable operating profit for 2022 to improve from 2021.
“This strategic direction and the refocusing of Cargotec demonstrate our commitment to profitable growth, sustainability and the excellence of our people adapting to new challenges. The board is convinced that it is the right time to ensure an accelerated but orderly transition to an even more profitable and futureproof business,” said Cargotec’s Chair of the Board Ilkka Herlin.
“Cargotec refined its strategy in April 2021 with sustainability and profitable growth as breakthrough objectives. Our vision remains, but we will further focus our businesses. That would enable us to accelerate M&A and R&D investments in our profitable core and I’m confident that with our refocused strategic direction we will be well positioned to capture growth in industry trends of electrification, automation and digitalisation,” said Cargotec’s CEO Mika Vehviläinen.
“With this planned balanced portfolio we will support our customers with lifecycle services as well as market leading equipment and technology in our profitable Core Businesses Hiab and refocussed Kalmar. These are recurring businesses with already above 10 percent comparable operating profit margins. The markets are structurally attractive and we hold leading market positions there. We are now planning to exit or evaluate strategic options for the project businesses where we have been less successful,” Vehviläinen added.