Changes in the economy
Indutrade’s business is dependent on its customers' purchases and investments. However, profitability is relatively unaffected by economic fluctuations, since the Company is represented in a large number of industries and investment goods constitute a relatively small portion of total net sales. As a result of these factors, demand for Indutrade’s products follows GDP growth in the Group’s geographic markets.
Relocation of operations
Relocation of industrial production to low-cost countries takes place in the markets in which Indutrade works. This has had a limited impact on Indutrade, mainly due to the Group's focus on customers with recurring needs in industries with high automation, high distribution costs and/or large initial investments.
Competition from low-costcountries
Sales of products from low-cost countries are on the rise in Indutrade's markets. The risk that Indutrade will be adversely affected by this competition is counterbalanced by the fact that the Group offers products and services with a high-tech content, a high level of service and qualified technical advice. Moreover, Indutrade strives to establish close partnerships with its customers by becoming involved early on in the planning and development phases, where its employees can contribute their expertise in 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, its primary suppliers must give their consent to the acquisition.
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 also conducts continuous competence development and management development programmes.
Environmental issues
Of Indutrade’s subsidiaries, nine in Sweden and three outside Sweden conduct operations that require permits or reporting under the Environmental Code in their respective countries and are subjected to regulatory oversight.