Valtra Grows Together with the Customer

24.09.2002

We selected Hungary for the introduction of our products partly because it will soon join the EU, and partly because we are extremely interested in this particular market, since the Valtra brand has for years been a well-known and recognised tractor brand in Hungary.

The customer is the cornerstone of our business. Our customers operate in various segments in agribusiness and in various geographical conditions. Therefore, we must understand customer processes and their related requirements. Today you saw new Valtra models, in the development of which a crucial role was played by systematic market research and customer satisfaction surveys.

Valtra is active in following market developments. In addition to market share, we follow the trends and sweeping changes in agriculture. The number of farms in the EU has fallen by 20 per cent in the past ten years. For example, with a 35 per cent decrease in the number of farms on that of ten years ago, the workforce in milk production is 43 per cent smaller than 15 years ago, although milk production has remained unchanged. This means that, today, machines are responsible for a higher proportion of productivity than before, and part of the work has been outsourced (e.g. in Germany, the share of contractors in silage production has risen from 50 per cent to 75 per cent in three years).

We have organised our marketing into eight strategic regions on a global basis, with each region being at a specific stage of development as a market for us, and having a certain potential. Both our product and business development cater for the specific needs of each region.

The basis of our ability to cater competitively for these diverse segments lies in the extreme versatility of our products. Also, while our customer-order system for production enables us to manufacture tailor-made tractors, Valtras are efficient and highly economical in use, leading to higher total productivity for the customer. Valtra increasingly stands out as a manufacturer of high-power tractors. The power of new tractors sold in the EU averages 100 hp, while that of Valtra tractors averages 110.

Our strategic tools for global business management include ‘Valtra Values’ and our strategic process called ‘Valtra Compass’, which provides all our personnel with the direction in which to head and the necessary performance indicators. The solid foundation underlying this is the product of Valtra’s systematic quality development, which has borne fruit in the form of the Finnish Quality Award granted in 1999.

Valtra’s operating profit for the first half doubled year on year, increasing from EUR 10.4 million to EUR 20.4 million. At the same time, our operating profit percentage of the turnover rose to 5.3 per cent. Most exhilarating to us is our capital turnover rate of 4.3, which is the highest in the tractor business, due to the unique customer order system we have now been applying for ten years.

Valtra’s order backlog grew by 54 per cent on a year earlier. Consequently, we have decided to increase our capacity in Suolahti with an investment of EUR 8 million, encouraged by our successful export operations to new markets, such as the USA, Australia and China.

Our new owner, KONE Corporation, has confirmed Valtra’s position as one of its core businesses. It is also noteworthy that maintenance and customer service account for 60 per cent of KONE’s business. Valtra’s business strategy, with its strong customer focus, is therefore in line with that of KONE Corporation.

(Extract of the speech by Mr Ilkka Hakala, President of Valtra Inc., delivered in Hungary on 24 September 2002)

Further information:
Mr. Ilkka Hakala, President of Valtra Inc., Tel. +358 204 55 0217

www.valtra.com

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