Ferronordic and Sandvik enter into distributor agreements for Germany and Kazakhstan and terminate agreements for Russia
Ferronordic has entered into agreements to become distributor for Sandvik mobile crushers and screens in Germany and Kazakhstan. Simultaneously, Ferronordic and Sandvik have terminated their agreements for Russia.
In Germany, Ferronordic will be responsible for sales, service and repairs of Sandvik mobile crushers and screens in most of the country. In addition to Ferronordic, Sandvik has another distributor in Germany, based in Dusseldorf, who will continue to operate in the Western part of the country. For customers in, for example, the construction and recycling industries, this means that Ferronordic, in addition to trucks from Volvo and Renault Trucks, will also be able to offer mobile crushers and screens from Sandvik. Ferronordic will also operate within a larger part of Germany than the area it has been responsible for with Volvo and Renault Trucks. Given the current area of responsibility for Volvo and Renault Trucks, Ferronordic expects that the total sales relating to Sandvik crushers and screens will reach approx. 15% of Ferronordic’s revenue in Germany.
In Kazakhstan, Ferronordic will be responsible for sales, service and repairs of Sandvik mobile crushers and screens throughout the country. This addition, alongside products from Volvo CE and Mecalac, means that Ferronordic will be able to provide a total solutions offering for customers in certain segments. In the future Ferronordic believes that the sales related to Sandvik crushers and screens can reach approx. 10% of the company’s sales in Kazakhstan.
At the same time, Ferronordic and Sandvik have jointly agreed to terminate their agreements concerning Russia. The cooperation between Ferronordic and Sandvik in Russia started in 2021. Due to the military conflict in Ukraine, Sandvik has stopped deliveries to Russia. In consideration of this, the parties have agreed that the dealer agreements for Russia shall be terminated as of today. Ferronordic does not expect the termination of the agreements with Sandvik in Russia to have any material impact on the outlook for its business in the country. Ferronordic is evaluating strategic alternatives for its Russian business.
Ferronordic’s CEO, Lars Corneliusson, comments: ”The cooperation with Sandvik in Russia which started in 2021 has been promising. It is very sad that this is now discontinued. At the same time we are proud of the confidence Sandvik is giving us in other markets. This is an important step towards becoming a leading service- and sales company in Germany and Kazakhstan. In certain customer segments, we can now offer total solutions concerning both service and machine fleet composition. In Germany, a larger share of our service work will need to take place at customer sites in the field. This will also strengthen the service offering for our truck customers. We will also get better absorption for our fixed costs”.
Ferronordic is a service and sales company in the areas of construction equipment and trucks. It is dealer of Volvo Trucks, Renault Trucks and Sandvik in Germany and dealer of Volvo Construction Equipment, Mecalac and Sandvik in Kazakhstan. Ferronordic is also operating in Russia where it is dealer of Dressta and Mecalac and offers contracting services where it owns and operates equipment to carry out works for customers. Ferronordic began its operations in 2010 and now has approx. 100 outlets and approx. 1,800 employees. Ferronordic’s vision is to be regarded as the leading service and sales company in its markets. The shares in Ferronordic AB (publ) are listed on Nasdaq Stockholm. http://www.ferronordic.com/
For investors, analysts and media:
This information is information that Ferronordic AB (publ) is obliged to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act (2007:528). The information was submitted for publication on 15 September 2022, 16:10 CET.
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