CARGOTEC PLOTS A NEW STRUCTURE AND GROWTH

Cargo-handling machinery group Cargotec has announced that it is to exit the heavy port crane part of its Kalmar business and is also now considering putting MacGregor up for sale.

The announcements followed the cancellation in March 2022 of a proposed merger between Cargotec and Konecranes. “This planned merger was our priority, but we had an uphill battle with the competition regulators – hence we have been working as a team developing an alternative direction,” said Mika Vehviläinen, CEO, Cargotec. A new refocused strategy would deliver strong returns for shareholders, he added.

Outlining a ‘new path’ for the business in an online presentation, he said the future Cargotec would be more focused and would drive sustainable growth around its core businesses.

“We will leverage our competitive advantages in our market positions, our technology offering and our service capabilities.”

Cargotec would also use its strong balance sheet to accelerate growth through mergers and acquisitions and investment in core capabilities, stated Vehviläinen.

Heading to the detail, he said Hiab, provider of on-road load handling equipment, remained very much a core part of the strategy and was a high-growth, high-performing business “which we plan to accelerate further”.

In the Kalmar cargo handling equipment and terminal solutions business, he explained the product focus would shift towards highly profitable mobile solutions, ‘horizontal transportation’ and related services, “leveraging our strong market position, our servicing and our capabilities in automation, robotisation and electrification”.

There would be an exit from the loss-making heavy cranes business – either by ramping down activities or by finding a buyer.

MacGregor, with its maritime cargo and load handling portfolio of products, services and solutions, had good growth prospects “but does not fit within our refocused strategic direction,” he opined. Options were being evaluated, including a potential sale.

As well as the heavy cranes sale and MacGregor review, the next 12 months would see an acceleration in the M&A pipeline in the core business around Hiab and the core Kalmar business, Vehviläinen confirmed. Cargotec would continue to drive competitive advantage by investing in electrification, robotics and digitalisation, and maintain a strong focus on climate change targets; climate change also presented business opportunities, he noted.

“In all of our core businesses, we are number one or at least a strong number two. A refocused Cargotec is an attractive investment opportunity.”

Vehviläinen was asked about exiting the heavy crane business and whether Cargotec would continue to service existing Kalmar cranes. “We are looking for a potential buyer but if we can’t find a buyer, we will simply ramp down – we will not take any more business,” he said, but there was a good opportunity to retain the servicing of existing cranes.