SORVI FINLAND: Building synergy between engineering workshops

PRESS RELEASE

Sorvi Finland Oy Continues Growth – Aiming to Consolidate and Strengthen Subcontracting in the Finnish Metal Engineering Industry

Sorvi Finland Oy continues its growth to strengthen the Finnish subcontracting cluster in mechanical engineering. The company has made a significant investment in Steel Vision Oy, building on the foundation laid in 2022 with the acquisition of Lajupek Oy. The goal is to create a more integrated and competitive supply network that meets the growing demands of modern industry, particularly in the defense, health technology, energy, pulp and paper, and heavy engineering sectors.

The full press release is available here.

Our subcontractors are more than the sum of the parts they make.

The engineering workshop industry relies largely on subcontracting. Milling, welding, machining, lathing, assembly, postprocessing, cutting, and the like, – most often products are made for a principal contractor and success is based on partnerships where partners help each other.

The Finnish subcontracting industry is fragmented, with each operator typically able to handle its principals’ needs only in its particular area of specialisation.

We at Sorvi believe that by getting the best workshops to join forces we can be more than the sum of these parts.

Added value for customers

Global subcontracting chains are changing and customers are actively looking for subcontractors located closer to their production facilities. In the midterm this will increase the demand for subcontracting and engineering workshop services and make possible growth of engineering firms of sufficient size as collaborative partners of the key principals. Consolidation of the sector will create an opportunity to tap into this growth potential.

With a larger subcontracting base we will be able to produce more extensively developed products, ones incorporating more work phases and larger units. This will facilitate procurement and aid in determining the price of the final product. What is more, with a greater capacity we can handle larger deliveries, which will bring cost savings and add resilience in the production chain.

Added value for investors

We are looking for selected investors to secure financing for new acquisitions. We hope that they might bring not only financing to the group but also business knowhow. Our ultimate goal is to see SORVI FINLAND grow into a solid and well-organised cluster in the subcontracting sector that will be able to serve a broader customer base with a more extensive product profile.

We estimate there might be 10 to 20 possible investments, of which a rare candidate could end up as part of the group. In our investments we focus strictly on quality and we scrutinise the candidates very closely, applying the following criteria, among others:

The potential investment must produce obvious and immediately recognisable synergy.
The investment must be economically attractive and on a sound foundation.
The investment must immediately give clear indications that it can bring clear cost savings.

Quality-oriented thinking is inscribed in SORVI FINLAND’S M&A strategy in the following terms:
”The wisdom of the investment should be so obvious that it need not be pointed out.”

Added value for workshops and their employees

Joining the SORVI FINLAND cluster is a sensible move on the part of an engineering workshop. As part of a larger unit, we can reduce our own subcontracting needs and open up new sales channels that would otherwise be beyond the reach of a single workshop. As part of Sorvi, you become part of profitable growth.

We have a number of alternative investment strategies that we discuss in detail when making a decision. We find the solution that best suits both parties.

In the group we offer employees prospects that would not be possible in a single workshop: we offer opportunities to upgrade qualifications and internal certifications throughout the group. Often, when changes occur, we can arrange work in another one of our units. For goal-oriented employees, a bigger company offers more paths forward.

Part of the Kare Group

SORVI FINLAND is a member of the Kare Group investment firm. The Kare Group is a Finnish investment firm which invests in real properties and unlisted companies.
Kare is a long-term and committed owner which values and fosters a partnership with the management of the companies it invests in, its investors and other stakeholders.

Kare’s values are creation of added value, a sense of community and good corporate governance.