As the summer is approaching, we would like to wish you a sunny and successful spring and summer for 2016. It would be fair to say that the economic outlook for companies’ and their expectations about the economy are slightly more positive than some time ago. However, these expectations haven’t shown much in reality when it comes to the Finnish metal industry. There have just been too many uncertainties both in Finland and elsewhere. Delays and complexities in the Finnish social contract negotiations haven’t improved the situation either and the “play” around it has really taken us nowhere. At the same time, we would very much welcome new investments into the metal industry as this is necessary to ensure our competitiveness in the future.
The first quarter of the year went according to budget at Jame-Shaft. In October and November 2015 there was a slight reduction in demand but otherwise the demand has stayed at a rather high level and has been quite stable too after the peak of last summer. As a matter-of-fact, our invoicing at the beginning of the year increased by 5 % compared with last year. Nevertheless, it is still too early to say where we are at the end of the accounting period and we will definitely exceed our invoicing from the last accounting period. For this significant reason, we would like to thank all our customers for making this possible for us.
Despite the high rate of utilization of capacity in the factory, we have managed to maintain our ability to deliver at a high level. This has taken the form of an improved delivery accuracy as well as a more positive customer feedback. The reasons behind these improvements are the new investments that were made last year, as well as our production development projects and an increase in the number of staff taken on. Today, we employ 53 people.
We know that it is difficult to foresee the future; however, we would appreciate it if you gave us (if possible) fore knowledge of your future plans. Changes in demand are quick, so it is very important to know the volumes required in the near future just to ensure a sufficient amount of raw material needed to meet this demand. Most of our raw material comes as direct factory deliveries and the delivery time, 8 -10 weeks on average, is significantly longer than the delivery time of finished products to our customers.
Summer holidays mean a break in steel deliveries and, for that reason, it is imperative for us to know which way we are going in the autumn. Your estimations help us a lot when we are making the new budget for the next accounting period (1.7.2016-30.6.2107).
Even though the summer has not started yet, we would like to remind you about the summer holiday period. Last year, we had an exceptional number of orders in June, which caused us a lot of pressure in the production which in turn caused major additional production costs. The positive side of it was that invoicing in June 2015 was the best ever! We have again decided that the factory will be operating without a break throughout the whole summer. Of course, the number of employees working in July is lower than normal but all stages of the production are in use in July as well. If necessary, please try to make note of this issue in your own operations so we can avoid the same kind of situation as we had in the factory in June 2015.
The new machines mentioned in our customer letter of autumn 2015 have now been taken into use. The multi-purpose turning machine has been working for quite some time now and the new nitriding furnace became operable in March this year. The first experiences from the machines are positive and we feel that they meet our expectations fully. Concerning nitriding, we can state that the risks are clearly lower now that we have two furnaces operating instead of just the one. For that reason, we welcome new requests for offers! The project on shortening the machine set up times and increasing the unmanned use of machines has been expanded. We have also included elements according to the 5S-method to improve the functionality of the work place. The results can be clearly seen in many of our work-stations.
Please pay a visit to our factory to see how many things have improved during the past two years. For example, we have managed to shorten machine set up times and down times and by optimizing the size of production series we have been able to improve our delivery accuracy too.
During the next accounting period, we are not going to invest as much money into new machinery as during the past two accounting periods when the significant investments were breaking records. We still haven’t made a more detailed investment plan but it is already clear that at least more capacity is needed for turning. The first priority this spring is to get the new machines working efficiently. We will tell you more about our future investments in the next customer newsletter.
We wish that the industry’s more positive expectations about the economy will soon show some evidence and take shape in an increase in the number of orders for all of us. Close co-operation gives us all a competitive advantage in the market. By developing our products and processes together, we can ensure that we are strong players in the market also in the coming years.