THREE PHASES OF DEVELOPMENT IN A SINGLE COMPANY
Nikkarit is the company of Finnish origin that has captured a niche in the construction sector by installing lists and invoicing by the metre rather than for hours worked. This is efficient and profitable while also cheaper for the customer. Following strong growth in Sweden, MD Mikael Olrog set his sights on Norway.
Nikkarit was founded in Finland in 1990, set up operations in Sweden in the early 2000s, and has been part of Mellby Gård since 2014. The company has found a narrow niche in the construction market and, through its specialization in this niche, the company achieves a competitive offering in terms of quality, efficiency and price. This involves installing lists, window and door frames and casings in commercial construction projects.
This is often the last work carried out in a construction project, and Nikkarit’s customers, who are the larger and medium-sized construction companies, appreciate being able to move their own carpenters on to the next project, assigning the final fine carpentry to Nikkarit. The business model entails invoicing by metre of list installed, making it profitable for Nikkarit to work quickly, while it can be cheaper for the customer compared with invoicing by the hour. Nikkarit’s employees are highly specialized and use equipment developed in-house. The end result is higher quality in less time and at a lower price.
Mikael Olrog began working at Nikkarit in 2015 and took over as MD in August 2017. He works alongside the managers of the three subsidiaries in Finland, Sweden and Norway.
“We have held a dominant position in Finland for quite some time, and the market is also mature. Accordingly, we have broadened the operations there to include installing windows,” he says.
In Sweden, Nikkarit is suffering growth pains following several years with growth of 20-30 percent. For this reason, the past year has involved investing in renewed internal administration and a brand new business system to manage the increased volumes.
“We saw that we had a little trouble keeping up. Accordingly, we have pulled back on the pace of growth in Sweden. Over the coming year too, the focus will be on establishing new procedures around the business system and internal skills development. In Sweden, we have set a fairly cautious budget for 2018/2019 and, after that, expect to return with renewed impetus for growth in Sweden,” says Mikael Olrog.
On the other hand, at the time of writing, the much-discussed slowdown in housing construction in Sweden has yet to affect the company.
“We are monitoring developments closely because we see our customers are affected. In Sweden, we are still too small to be influenced by such trends. However, that also means I regard our future potential with great confidence,” Mikael Olrog continues.
In Norway, however, the company is being positioned for rapid growth. Operations were established in that country just over two years ago and, in the past year, the company secured a breakthrough order, larger than the entire subsidiary’s annual turnover to date.
“Our three subsidiaries have completely different prerequisites. In Finland, we are dominant in lists and must broaden our operations to grow. In Sweden, we are transitioning from being a small regional player to being active in many of the larger cities, and in Norway we are still at the start-up phase. This requires different strategies in each country,” says Mikael Olrog.
It is partly because of this that he appreciates the company being part of Mellby Gård. The Board of Directors incorporates experience from all three stages of development. It also takes the long-term perspective required to allow, for example, the Swedish operations to consolidate and catch up.
“Nikkarit being part of Mellby Gård played an important part in my accepting this job. This brings expertise and financial clout. Mellby Gård also represents a good value base that I share. You must be honest and make fair deals , which is not always the case in the construction industry,” says Mikael Olrog.
“The atmosphere at Mellby Gård is relaxed but still highly professional. When the Board meets, members stop to chat with our fitters and supervisors. A positive contribution in every way.“