Reka Industrial expanding rubber operations after cables exit
Finnish group's investments include increased production of 'black hoses' at site in Poland
Aura, Finland – Reka Industrial is to increase investment in the group's rubber activities having recently completed the sale of its cables segment to Nexans Group.
With about 270 employees, Aura-headquartered Reka Rubber claims to be one of the leading technical rubber product suppliers in northern Europe.
The Reka subsidiary is particularly focused on the manufacture of rubber components for vehicle and mechanical engineering industries.
2023 is "the year of investments for future growth of the rubber segment," the Finnish group said in its half year financial report.
Reka Rubber, it noted, "has a strong position in selected market segments. Delivery performance of all factories is good.”
Plans to expand the rubber business include a recruitment programme, with "key appointments" already made in sales, product-development and procurement roles.
Meanwhile, Reka Rubber has raised productivity of its operations: transferring production of injection moulded products from Poland to its Aura plant at the end of 2022.
“The transfer is complete, and the Polish production unit [in Dopiewo] now concentrates on manufacturing 'black hoses' and silicone hoses,” stated Reka.
To increase capacity for 'black hoses', Reka said it had now ordered a new €1.3 million extrusion line for the factory in Poland, which is expected to start production by August 2024.
In addition to the extrusion line investment, Reka said there were plans for “smaller capex both in Finland and Poland” to support growth and productivity.
Over the first six months of the year, the rubber segment's earnings (EBITDA) fell marginally to €1.3 million, on 7% higher year-on-year sales of €17.1 million.
Group-wide, meanwhile, Reka Industrial saw earnings increase fourfold to €38 million, despite a 22.5% decline in sales to €78 million.
The Finnish group completed the sale of its Reka Cables segment to Nexans Group in April, registering a gain of €31 million for the transaction.
Reka noted that, with the sale, it expects its first half results to “substantially differ” from the second half which will reflect only rubber segment results.
Reka's cables unit reported sales of €61 million and earnings of €6 million during the first six months of the year.