Robust gains for Reka as production issues are addressed

Hyvinkaa, Finland – Reka Industrial Plc has reported a 24% year-on-year rise in sales, or €30.6 million, at its rubber segment and earnings (EBITDA) 73% higher at €2.6 million.

The gains were despite staff turnover challenges and overtime issues in Poland, as well as increased material and logistics costs.

“There is a clear delay in the transfer of increased procurement costs to customer prices, the Finnish group added in a 23 Feb results statement.

Reka went on to describe delivery capacity for hose production in Poland as “challenging” for most of 2022, despite overtime and hired labour.

“Production volumes were increased, but customer order volumes grew even faster,” said Reka, though adding that  delivery capability had reached a “good level” by the yearend.

To raise productivity of the Polish production unit, the rubber segment initiated the transfer of mould product manufacturing made with injection technology from Poland to Finland at the end of 2022.

“The transfer will take place in stages and will be completely completed in April 2023,” according to Reka.

With the arrangement, it stated, mould product manufacturing of the company’s Aura production unit in Finland will increase.

The Polish production unit will then “be able to increase the delivery quantities of black hoses and silicone hoses.”

“Customer demand is still growing, and with the help of the change, it is possible to better meet the growing volume needs,” the group statement concluded.

Reka Industrial, he noted, bought Reka Rubber in 2020, when Reka Rubber's turnover was around €20 million, noted Jukka Poutanen, the group’s managing director.

The rubber unit, he said, has now achieved “the biggest turnover in its history, and market prospects create good conditions for reaching the next turnover category. The demand situation is good.”

Reka Rubber is a manufacturer of small and medium-sized series of rubber components for the vehicle and mechanical engineering industries.