 Rapala’s vision is to become the global leader in the fishing tackle industry. This will be achieved through profitable growth. In the last few years, the Group has implemented major actions to improve its profitability while continuing to grow. In 2009, this growth took a pause as a result of the difficulties in the world economy and the Group focus was directed on a turnaround in cash flow. Rapala’s strategic objective is profitable growth. This strategy is founded on three sub-categories and established strengths: a leading global distribution network in the fishing tackle industry, a strong brand portfolio with several leading brands and a unique manufacturing, sourcing and R&D platform. Rapala’s distribution network covers four major continents and is locally present in some 30 countries. It allows the Group to introduce new products efficiently and effectively to the market and to build strong partnerships with local retailers and fishermen. On the other hand, the wide distribution network also acts as a channel for market and customer input, which is used for product development. In addition, the Group uses external distribution agents in more than 100 countries where the sales volumes are lower than in the core markets. Rapala also has an important distribution alliance with Shimano.
In addition to Rapala, the leading brand in the fishing tackle industry, the Group’s brand portfolio consists of several other well known brands like Storm, Luhr Jensen, Blue Fox, Williamson, VMC, Sufix, Trigger X, Marttiini and Peltonen. The brand for any new product can be chosen from this portfolio to match the targeted market segment or price category.
The Group’s manufacturing and sourcing platform consists of fully restructured manufacturing operations in China with four own factories and dozens of outsourcing partners, Europe’s largest production facility for lures with specialized factories in Finland, Estonia and Russia, the most advanced treble hook production facility located in France, and high quality knife manufacturing in Finland. Rapala has an extensive sourcing platform and process to ensure high quality but low cost third party manufacturing for its selected products. Rapala’s research and development is globally well known and respected for its capability to continuously introduce new high quality products with new and exceptional features. Implementation of the Group’s strategy for profitable growth continued in 2009 with high emphasis on making a positive turnaround in cash flow and finalizing the new operating model in Chinese manufacturing operations.
The results of the major working capital initiative to reduce Group inventories and improve cash flow started to capitalize in 2009. To support this development, a major global supply chain and logistics initiative to shorten the lead-times, lower the inventories and further improve the service levels to customers, was started in 2009. This project continues in 2010
The performance improvement initiatives at the Group’s manufacturing facilities in China were finalized in 2009. With the new set-up of Group-owned factories and a network of outsourcing partners, Rapala can adjust capacity more quickly and more accurately to meet the market requirements. The benefits will also include shorter lead-times and improved service levels. As a result of the new operating model, the Group has reduced its headcount in China considerably.
The integration of Sufix fishing line business was completed in 2009. Rapala intends to increase its worldwide fishing line sales to some EUR 20 million in the next few years. The long-term strategic target for Rapala is to increase its annual fishing line sales to EUR 30-50 million.
Discussions and negotiations regarding acquisitions and business combinations continued in 2009 and Rapala acquired the fish pheromone brand Ultrabite and signed an exclusive agreement to commercialize this patented pheromone technology to the sport fishing market. Rapala’s sales of products including pheromones were less than 2 MEUR in 2009 but it is expected that the sales will grow substantially in the future.
To further expand and strengthen its distribution network, Rapala established a new distribution company in Romania. The process to establish new distribution companies in Iceland and Belarus as well as a specialized distribution company for gift products in China was also started.
In addition, the Group introduced and implemented several other performance improvement initiatives like further development of lure manufacturing processes and restructuring of Hungarian distribution operations. |