27.10.2011

Cargotec to split Hiab and Kalmar

Barely a year after it integrated Hiab and Kalmar into the Industrial and Terminal division, Cargotec has decided to split them again into two separate business areas, Load Handling – Hiab and Terminal – Kalmar.

As part of the change the factory operations and related sourcing activities will be divided into the new business areas. The Terminals business will be led by the current division head Unto Ahtola as executive vice president Terminals.

Axel Leijonhufvud has been appointed to lead the new business area- Load Handling as executive vice president Load Handling. He is currently responsible for Supply. The changes will come into effect at the start of January 2012.

Cargotec says that the change is driven towards customer solutions and its vision to be the world's leading provider of cargo handling solutions. The renewed focus on Load Handling aims to strengthen its market position in this area, which is largely loader cranes.

The change will include a streamlining of the centralised support and supply functions. Cargotec's accounting operations, Cargotec Shared Service Centre, located in Turku, Finland and Ljungby, Sweden, will be outsourced to an external partner.

Vertikal Comment

Cargotec announced the merger of Hiab and Kalmar roughly around this time last year and at the time it did not seem to make too much sense, apart from perhaps by sharing some back office functions. However the process has moved on and from an outsiders point of view seemed to be working as local organisations were merged into larger operations.

It is therefore surprising to hear that less than a year after the mergers took effect it is undoing it. There is though good reason in terms of market focus to separate them, but that was true 12 months ago. However, far far better to admit a mistake and move on, than determinedly continue to try and make a strategic error work, when it is not the ultimate solution for the business.

The change makes good sense for the long term futures of each business.