In a first half-year characterized by a worldwide market environment with varying levels of demand, Kuhn Group achieved a marked increase in sales and operating profit.
According to an interim report from Kuhn parent Bucher Industries, demand remained buoyant in North America and northern Europe, but experienced a downturn in southern Europe where farmer confidence has been hit by national debt concerns.
In Eastern Europe, where a marked recovery in sales has been seen over the previous two years, the report notes the first signs of a more restrictive lending climate for both dealers and farmers are emerging.
For the January to June period, Kuhn Group recorded a net sales rise of 20.4% over the year prior to the equivalent of $715.5 million. Even when adjusted for currency and acquisition influences, the percentage increase amounts to a near-18% rise. Pre-tax profit grew 26.4% while operating profit as EBITDA rose 21.7%.
“Factors contributing to this success were the high level of capacity utilization, newly launched products and a transparent pricing policy based on continuity,” says Bucher CEO, Philip Mosimann. “Thanks to intensive collaboration with distribution partners, it was possible to maintain inventories at a normal level.”
The Kuhn Krause unit, bought in May 2011, contributed $40 million to revenues in the first six months and developed “very satisfactorily” while working at the limits of production capacity, says Mosimann.
Restrictions should ease next year after a $5 million investment (including $3 million in the current financial year) allows a significant increase in output, as Kuhn Krause president, Keith Whitaker, explains. “The 70,000 square-foot building, due to be completed in October, represents a 40% increase in our production area so it’s a very significant investment, especially in relation to our own investments over the years as an independent company,” he told Ag Equipment Intelligence. “The new production machinery and assembly area will improve efficiency and quality as well as capacity, with new, state-of-the-art technology and use of lean manufacturing strategies.”
“Becoming part of the Kuhn Group has presented distribution opportunities with dealers already handling its hay products in areas where they can also sell tillage equipment,” Whitaker adds. “But due to capacity constraints, we’ve not been able to act on those opportunities.”
Recruitment at the expanding Hutchinson, Kan., plant continues. “Since May last year, we’ve recruited 60-65 extra staff and we’ll be looking for more as the new production facility is readied,” says Whitaker.