“It is enough for each one separately, and too little — for everyone put together”

An extract from the “Dienas Bizness” article “It is enough for each one separately, and too little — for everyone put together” (Katram atsevišķi – daudz, kopā – maz)

UPB and Skonto Būve, for which foreign markets are traditionally a significant area of business activities, continue working for exports. In the recent years, UPB Holding has maintained its 60:40 ratio between foreign and local markets. This year, this proportion may shift a little, as export markets are predicted to grow faster than the local market. However, the goal is to keep this ratio, therefore there are no plans to lower the company’s activities on the local market. “Owing to our dedicated and timely strategic actions, UPB export markets still have potential for growth,” the UPB Chairman of the Board, Dainis Berzins said. According to him, this year, UPB plans to increase its turnover in foreign markets by 10%, using the contracts that have already been signed. For some products, the holding’s manufacturing capacity is already at 100% for this year. “Undoubtedly, there is always space to grow further. The forecasts are good for all the markets, in which we work — Scandinavian countries, Germany, and now also the UK. UPB’s objective has never been to export specific construction materials or services, but rather to offer an all-inclusive package,” D. Berzins emphasised. “We do not seek to compete by exporting simple generic structures: our advantage is technologically complex structures with the highest added value possible,” he noted. The largest construction projects, in which UPB currently participates, are in Scandinavia and include Tyfonen, the 14-floor building with an underground car park in Malmö, the Södertälje hospital in Stockholm, the Munksjö 16-floor office building in Jönköping, the Klockarbacken 16-floor residential building in Stockholm and others.

At the same time, the UPB chief does not predict a lot of growth for the local market this year. He points at global events: the military conflict between Ukraine and Russia, which affects the investments coming into Latvia from the East and creates reservations for investors from the West. Furthermore, the local market is affected by breakthroughs in the EU structural fund programmes. Should both these circumstances coincide, growth could begin again in the middle of 2016. This is not good for the industry in general, because such great rises and falls lead to low efficiency throughout it. “This is the same as in any other manufacturing industry: stability enables maximum efficiency,” the company chair explained. He also commented on the number of employees in the industry: according to the latest statistical data, it is very unstable. This means that, during the periods of lower activity, the industry loses its specialists and bringing them back can be complicated. This also leads to higher competition among companies, which, eventually, affects the quality of construction. “If, in a stable market, the client is the winner, then, in the current market conditions, the client only loses,” D. Berzins pointed out.

The full article is available in 05 May 2015 issue No 83 (4943).

Lasma Vaivare, Vesma Levalde
Source: Dienas Bizness