After less-than-successful 2016 – a new phase for KG Constructions

2017.07.25

KG Constructions, producer of the most innovative aluminium-glass constructions and facades in Scandinavia and Eastern Europe, had a difficult last year. However, now the company is optimising efficiency, as well as changing its strategy and attitude towards its projects. According to their press release, from now on, the company prioritises only large projects, whose value exceeds 3 million euros.

CEO of KG Constructions Linas Karžinauskas was open about 2016: “Unsatisfactory financial results of 2016 were caused by inefficiencies in various production chain links and a huge number of projects. In 2015 we managed as many as 29 projects. Last year, the number of projects decreased to 24, but that was still too many. In the end of the year, we implemented huge changes in our company. We drastically reformed Sales and Finance departments, hired professionals of these areas and are going to end this year with 10 substantial and big projects”.

The changes bore fruit – the first six months of 2017 were of exceptionally fast growth. In comparison to the respective period of the last year, KG Constructions and KGC Sweden increased their turnover for these six months by 28 %, whereas consolidated net income was 21 million euros. Planned turnover for this year is 42 million euros.

According to Mr. Karžinauskas, the second half of this year provides scope for optimism. “All of our smaller projects will be completed this month and therefore, a new phase will begin. Based on our plans for 2017 and 2018, we have already signed contracts with such construction giants as HENT, Skanska, PEAB and NCC. In total, these contracts are worth 55 million euros”.

In this beginning of July, KG Constructions started using Enterprise Resource Planning system, which will help to optimise storage, ensure unified functioning of the procurement, supply and logistics system, manage human resources and will allow to carry out a more detailed production and finance analysis. “We cannot imagine our future without this system. It will help us to save money and work more efficiently.” – said Mr. Karžinauskas.

According to him, the company is still planning to build a new factory: “The beginning of construction works is planned for the middle of next year. It is no secret, that we had to postpone this project due to the results of 2016. However, I would like to rejoice that our clients are supportive of this project, which encourages us to achieve to this goal faster.”

The company has set itself very ambitious goals for the next five years: “We are already the leading company in the Nordic region. We work in all Scandinavian countries and carry out projects not only in Sweden or Norway, but also in Finland and Denmark. This year, 70 % of our business is carried out in these countries and only 30 % in Eastern Europe.” – stated Mr. Karžinauskas.

The CEO of KG Constructions has no doubt that becoming one of the leading companies in  Europe and being among such companies as Parmasteelisa, Fill Metallbau or Yuanda is very realistic.