Whether you prefer to get your news from the newspaper, online, or on television news, you cannot avoid hearing about rising inflation, falling house prices, and interest rates regularly getting a boost. It is a tricky cocktail that is hitting households and businesses hard. And, of course, that includes the construction industry, and by extension, Baron.
It is no secret that rising material prices have had an impact on the construction industry. With rising interest rates comes another blow to this industry, affecting many suppliers to the construction industry – and, therefore, us. The big question is, what are we doing to resist until we hit rock bottom and be best equipped for the recovery? Because there will be a recovery. That is indisputable. And we need to be ready for it.
What surprises me most is how fast and hard it has hit. It is not just our industry, but most industries.
At Baron, we are reaping the rewards of our work so far and the fact that we got a bit lucky by starting to digitise our sales efforts and expanding into new attractive markets. We are privileged to be present in more than 40 countries, not all of which are as hard hit as we are, for example, in Scandinavia.
Our product range also means we don’t get stuck. The products that are exclusively related to construction, and that is for example Forced Action Mixers and the SmartMover. Yes, you can feel it – they are in stock for a little longer. Quite clearly. After all, a product group like our Conveyors is used in all sorts of contexts, so we are actually seeing an increase in sales of your Conveyors.
So, it is to our good fortune and advantage that we have a growing product group that can compensate for some of the things we are losing when it comes to Forced Action Mixers and SmartMovers.
Where some take a defensive approach, we have chosen to go the opposite way. First of all, we have launched a lot of sales activities. We MUST be able to sit around the round table and look each other in the eye and say: we have done what we could. In addition, of course, we are continuing our digitalisation journey. We need to optimise everything. This also means that we are now a small group of people who cannot be any smaller in order to make things work, without this being seen as a negative thing. An example is our marketing efforts, where we work – close to – exclusively digitally and try to generate a mix of awareness around the company and a demand that has a quality that makes us spend our sales resources where it makes sense. Sales can work much more efficiently and with a higher success rate. This is one of the things that enables us to uncover markets relatively quickly and to quickly establish contact and dialogue with those who are genuinely interested in us as possible suppliers. I think I can see that starting to work. So, I think we have adapted to a difficult time and have actually been a bit ahead of the curve.
I hope and believe that there will be a normalisation because what we see is that demand has decreased in general. As a result, these carriers that have scored high on the crisis will have to normalise their prices, and just like that, we will start to have a normal flow through the whole world supply. That actually makes me fairly optimistic that we can get back to normal fairly quickly. You have to change behaviour as demand falls and then you have to bring your prices down on, for example, freight. Market economics is proving its worth because supply and demand will control prices.
It is actually quite simple, although we are in a difficult period right now and will probably be in it for some time.
I must admit it would be nice if things were just “normal”. How nice it would be to be able to drift and look into a reasonably foreseeable future since that hasn’t been possible for 3 years. It might actually be a bit nice to stand up on a beer case in the company and then be able, with reasonable certainty, to make a budget and a plan of action and activity 1-2 years ahead that you have an expectation will hold true. I hope the future, on the other side, brings us that.
We are doing what we can.
No Compromise,
Carsten Filsø
Visit the Baron UK Ltd website for more information on Carsten's Corner: We are doing what we can