Strategy implementation continued on a strong growth path
Norrhydro's net sales continued to grow in the first half of 2023 as the growth of the overall market came to a halt and our growth was again higher than the market growth. Growth was strongest in the mining segment, while the demand increased moderately in material handling and marine segments. Demand in the forest machinery industry, on the other hand, decreased somewhat compared to the demand in the corresponding period last year.
The implementation of the strategy and the measures required by it continued, and this is reflected in the company's profitability. The ramp-up of the new production plant, product development of digital business and investments in various customer projects in the conventional hydraulic business have caused significant expenditures during the first half of 2023.
The implementation of strategic measures will continue to affect the company's profitability in the near term until the implemented actions become visible as improved profitability and growing net sales.
I’m particularly pleased that the new production facility has been ramped up into serial production and that the production operations have stabilised after a long and challenging ramp-up process. We are well-positioned to grow our business.
Our sales operations are very active, especially in new customer acquisition. Therefore, it is great to note that, according to our strategy, we have succeeded in acquiring new customers, which is especially important for our long-term growth. The annually increasing cylinder manufacturing capacity of the new production facility is sufficient to support both the needs of current customers and completely new customers. Our goal is to continue to grow faster than the market as a whole.
The manufacture of hydraulic cylinders has been at the core of our operations, but the development of our new digital services continued intensively in the first half of the year. We have numerous active development projects in our portfolio for both the NorrDigi® motion control system and the Motiomax by Norrhydro, electromechanical cylinder. We have succeeded in opening doors with potential customers interested in our digital solutions. In 2023, as part of ongoing projects, we will deliver prototypes to our customers for customer tests and manufacture prototypes for our own test purposes. Major product testing operations to ensure serial production readiness are ongoing. There is still a long way to go from the projects to the start of large-scale serial production, but as in the previous year, the development has been encouraging and has strengthened our belief that there will be demand for our digital solutions from both existing and new customers in the future.
In addition to increasing cylinder capacity, we have further developed the operations and processes of our new production facility in Rovaniemi. Continuous development is part of our strategy and everyday operations, as Norrhydro's core values of creativity and excellence state.
The biggest price increases in materials and components seem to have finally passed, and the availability situation also seems to have levelled off for the main materials. The starting point for the second half of the year from this point of view would therefore seem to be calmer than a year ago. On the other hand, the global situation under the threat of recession creates some uncertainty for our customers and thus for our own operations. However, I am confident that we have a good foundation to continue on Norrhydro's growth path in line with the strategy we have created.
