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Markets and production

Industrial Systems

Key market developments

Food is the most important market within Industrial Systems. The most important submarkets are served with seven production plants in four countries. These are the global poultry, convenience food and pet food sectors and the construction of water supply lines for sanitation and clean water. We achieve a good spread of products across different countries and customers in these markets. In 2022, we generated revenue in 96 countries (2021: 90) with a revenue of €157 million (+19%). The fall in revenue in Russia and Ukraine caused by the war was more than compensated for in other regions. The vast majority of revenue (97%) was generated outside the Netherlands (2021: 94%). Revenue fell in Europe, but increased in North and South America, Asia and Africa. Specialisation and standardisation remain necessary to stay cost-effective in our niche markets. Standardisation has allowed us to reuse good solutions, thus lowering our costs and risks. We will continue with this in the coming years.

The continuing scarcity of materials and labour leads customers to invest more in automation and material-saving solutions. The order book position at the end of 2022 rose again compared to the position at year-end 2021. The number of projects larger than €50 thousand decreased in 2022, from 181 to 139 projects. This shows that projects got bigger on average. There was an increased investment appetite among extrusion machine customers and hatcheries. On the other hand, some expansion and replacement investments were postponed, especially in Europe. This was compounded by uncertainty due to inflation, rising interest rates and energy costs in particular. Demographic developments support long-term demand in Africa and Asia. Maintaining a strong market position with high-profile customers remains crucial in every region.

Main production developments

Ongoing turmoil in the supply chain has created challenges in the production of our systems. Some materials were difficult to obtain or had very long and unreliable delivery times, while for other materials, we faced unexpected price increases. Nevertheless, the production backlog was generally limited, although inventory levels rose.

Lan’s production of handling systems showed a marked increase in 2022, achieving a good result. Tilburg took full advantage of increased volume flexibility for production in 2022 due to the successful outsourcing of the pre-assembly of complete submodules in the previous year. Lan also acquired some more new customers in 2022.

At Royal Pas Reform, production of hatchery systems rose considerably in 2022. The global poultry industry has recovered from the Covid-19 crisis. Royal Pas Reform is a ‘total solutions provider', a positioning that has caught on particularly well in the US. Revenue in the US was considerably higher, but operations in South America and Africa in particular also contributed to the increased revenue. Revenue in Russia and Ukraine showed a sharp decrease due to the war. We started sales and production of the patented in-ovo vaccination system in 2022, which we introduced in 2021.

Rollepaal’s production of pipe extrusion systems increased strongly in 2022 compared to the previous year. The increase was present in Europe, North America and Asia, and was experienced across all product groups, but particularly in the PVC-O product group, where another new machinery line for pipe production was delivered in 2022. It consumes up to 60% less material than conventional machinery lines. The focus that was applied in the market approach has paid off, with extensive attention paid to sustainable and cost-saving solutions for customers.

High-Tech Components

Key market developments

High-Tech Components’ most important markets are Mobility, Food and Health. These markets are served by seven production plants in five countries. The components were exported to 38 countries in 2022 (2021: 38) with revenue of €128 million, unchanged from 2021. In the Mobility market, our technology is applied in fuel, braking and drive systems, dispensing systems and sensor technology for autonomous driving. We have further reduced our dependence on the automotive market by developing new parts for lorries, mopeds, and bicycles. The innovative strength mainly focuses on autonomous driving and electrification within the automotive market. Whereas demand was still picking up at the beginning of 2022, it once again dropped in the second half of the year due to an unstable supply chain. A shortage of chips again led to car factories being shut down and being unable to produce enough to meet demand. It seems that these shortages can be made up during 2023. All in all, revenue levels in 2022 kept pace with those in 2021.
The Food market picked up well in 2022. In particular, we saw demand for dispensing systems for out-of-home products, such as coffee and beer, rebound to pre-Covid-19 levels last year. Revenue increased strongly in these product groups.

Revenue in the Health market also increased significantly. In particular, regular high-volume production for new MicroFluidics cartridge applications picked up in 2022, albeit with a delay. This development resulted in other engineering assignments from renowned customers in the medical sector. The rising demand for smart sampling methods with ‘smart consumables’ ideally positions Helvoet for various health-tech applications, such as medical cartridges, point-of-care instruments and diagnostic devices.

Production developments

Revenue was unchanged from 2021 with fewer injection-moulding machines (213 instead of 225) due to the phase-out of production in Poland. In the Netherlands, we focused explicitly on scaling up MicroFluidics projects in cleanroom conditions. Helvoet supplies nanoplates: small plastic plates with precision channels. Several injection moulding machines, vision equipment, an assembly line and a cleanroom were commissioned to produce these components in Tilburg last year. Due to supply chain issues with our customers, the activity level at the site in Germany was markedly lower than in 2021. Chip shortages in the automotive industry caused a significant decline in revenue in Belgium, while the production company in India experienced strong and healthy growth. To facilitate further growth in India, it was decided to buy the real estate and stop renting it.

Timmerije saw a marked increase in production in 2022. This is partly due to passing on higher raw material prices but largely in response to the increased demand. The improved feedback of information from the Manufacturing Execution System, which monitors production processes, has resulted, among other things, in an 8.5% reduction in waste. In Neede, new customer projects have been launched to manufacture complex, often composite parts. To absorb the growth in our activities, we decided to expand capacity in Neede. More injection moulding machines will be installed by organising finished product storage elsewhere.