Expansion and growth in Primo Russia
Topic: Building, Lighting, Energy & Offshore, Medico, Transport, Electronics & Packing Tubes, Refrigeration & HVAC
As many Western companies struggle to stay in the Russian market, Primo benefits from having local production and a local sales organisation serving its domestic customer base. As a result of a strong development of Primo in the Russian market, Primo Russia increases its production capacity significantly.
In the wake of political turmoil, falling oil prices, a mix of sanctions and an unstable currency situation have had a severe impact on the market situation in Russia. Western companies dealing with the Russian market have been severely hit as well, as their export into the Russian market is in decline and prices are dropping.
As a result, industrial companies in Russia are increasingly insourcing suppliers and deliveries of raw materials and supplies to Russia.
Whereas this trend has had a negative impact on many Western companies exporting to Russia, Primo has had the advantage of having its own production and sales setup in Russia.
Local production with internationally renowned quality standards
Claus Tønnesen, CEO of the Copenhagen-based Primo Group, explains: “The overall picture is quite bleak, but at Primo Russia we have managed to turn the situation to our own advantage. We are capable of sourcing raw materials from the Russian market for our production in St Petersburg, and this means that we are unaffected by the negative development in currency and prices in general. As a result, we can produce locally and still retain the high quality level our customers demand.”
Primo Russia produces profiles for many business areas, but the main markets are the white goods, lighting and transport industries, all of which are booming as imported products are becoming more expensive. Consumers are looking for domestic brands, and Russian producers require locally produced components of high quality and at local price levels – which is precisely what Primo Russia offers.
This has led Inter Primo to expand the group’s activities in Russia.
“Recently, we have increased our extrusion capacity by 50% in our Russian facilities,” says Claus Tønnesen. “We have doubled our production area at our St Petersburg plot, all as a result of remarkable sales growth. Primo Russia has achieved a critical mass in terms of customers, capacity and sales, and we expect this positive development to continue in the years to come.”
Primo Russia has app. 42 employees and a turnover of 160 m roubles, equivalent to app. € 2 m. Primo Russia serves business areas such as the white goods industry, transport, lightning and windows and doors.
The Primo Group was founded in Denmark in 1959 and now has subsidiaries in seven countries.