For Indutrade companies involved in trading, there is the risk of an agency relationship being terminated. This could occur, for example, in connection with a structural change at the supplier level. This is a natural occurrence in an agency's operations, and the organisation has experience in dealing with this. Indutrade has more than 100 trading companies with a few main agencies per company, complemented by a number of smaller agencies. Because of the large number of agencies, no individual agency accounts for a decisive economic risk from the Group's perspective.
The risk associated with major customers deciding to bypass the agency level and trade directly with the producers is limited, since customers place great value on the technical expertise, availability and delivery reliability provided by an inventory-holding local technology sales company such as Indutrade. Indutrade's companies also provide aftermarket services such as servicing.
Changes in the economy
Indutrade’s business is dependent on its customers' purchases and investments. The effect of economic fluctuations in specific sectors or geographic markets is mitigated by the Company's involvement in many different sectors and geographic markets, and by the fact that investment goods account for a relatively small share of total net sales. Owing to these factors, demand for Indutrade’s products follows GDP growth in the Group’s geographic markets.
Outsourcing of operations
Although outsourcing of industrial manufacturing to low-cost countries takes place in the markets in which Indutrade is active, it has a limited impact on the Group. This is largely because Indutrade has chosen to focus on customers with a recurring need in industries with a high degree of automation, high distribution costs and/or large initial investment.
Competition from low-cost countries
An increase in products from low-cost countries can be seen in Indutrade's markets. To counter the effects of this competition, Indutrade offers products and services with a high-tech content, a high level of service and qualified technical advice. In addition, Indutrade strives to establish close partnerships with customers by becoming involved early on in the planning and development stages, where the Group's employees can contribute their expertise about various processes.
Changes at the supplier level
There is always a risk of suppliers leaving a partnership with a technology sales company to set up their own sales organisation. Consolidation among manufacturers is one trend in the market that points to this. Indutrade addresses this risk by choosing suppliers who view a partnership with Indutrade as the most cost-effective sales method. Stable supplier relationships are one of the parameters that are assessed prior to Indutrade’s acquisition of a company. To ensure that an acquired company does not lose its product agency agreements, acquisition plans are checked with the target company's main suppliers.
Key person dependence
The risk of losing experienced employees is accentuated in connection with company acquisitions. Consequently, Indutrade’s acquisition strategy includes ensuring that the target company’s key employees are motivated to continue running the company after the acquisition. To attract and retain key personnel, Indutrade conducts continuous competence development and special management development programmes.
Environmental matters
Nine of Indutrade's Swedish subsidiaries conduct operations that require permits or reporting in accordance with the Swedish Environmental Code. Three foreign subsidiaries conduct operations subject to an equivalent permit or reporting obligation.
None of the Group's companies are involved in any environment-related disputes.