Annual Report 2006 - Euromaint

E u r o M a i n t A n n u a l R e p o r t 2 0 0 6
Report of the Directors
The Board of Directors and President of EuroMaint aB hereby submit the annual Report for the 2006 financial year.
EuroMaint aB is a wholly-owned subsidiary of aB Swedcarrier, with registered number 553036-3409 domiciled in
Stockholm, Sweden, and is wholly-owned by the Swedish state.
Continued consolidation,
streamlining and internationalisation
The Group’s aim is to be actively involved in the consolidation of the
maintenance industry.
The acquisition of Euromation AB and maintenance contracts for
commuter trains in Stockholm and the Arlanda Express are some
examples of operational decisions aimed at realising the Group’s aim
of becoming an important player in the maintenance industry, not
only in Sweden but also internationally.
New maintenance concepts with total undertakings in partnershipstyle
agreements, of the type used in EuroMaint Rail, are being
developed for EuroMaint Industry. The aim of this strategy is to make
it possible for the companies to advance up the value chain. EuroMaint
wants to develop partnerships with its customers and thereby establish
long-term incentive-led servicing contracts. Strategic collaborations
with companies that develop different technical solutions and systems
enable EuroMaint to swiftly bring new technology to its customers.
We have taken crucial steps during the year to realise our ambition
of becoming a player on the international market.
Since 2003 EuroMaint has carried out a number of structural
measures to achieve increased cost-effectiveness and has implemented
an efficient financial control model. These development initiatives
will continue in 2007 and create further competitive advantages for
the Group.
Operations
A decision has been taken to start up an operation in the Baltic region
and this establishment has begun.
In stiff competition, EuroMaint Rail has won its first major
international order, a refurbishment contract for the Norwegian State
Railways, NSB.
In addition to several new contracts and contract extensions
among existing customers, the company has also won a number of
brand new orders during the year. In June EuroMaint Rail took over
responsibility for technical maintenance of the commuter trains
in Stockholm. A new operator on the Swedish rail market, Arriva,
awarded EuroMaint Rail the maintenance contract for the Pågatågen
commuter trains.
Additional orders for EuroMaint Industry’s unique Automated
Guided Vehicles (AGVs) have been received both within and outside
of Sweden. Alongside the established services the company is also
investing in new concepts. The Total Service Concept (TSC) is an
important element in the aim of strengthening market position
and bringing about volume growth. The concept entails EuroMaint
Industry offering a full service undertaking in maintenance, spare
parts management and component servicing.
Personnel
In taking over maintenance of the commuter trains in Stockholm,
EuroMaint increased its workforce by around 100.
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EuroMaint Industry has adapted its organisation partly in line with
the altered product mix, and partly to create conditions for growth.
The company has also begun a major recruitment process for
specialist expertise.
‘Dialogue for Participation’ is the name of the long-term project
initiated by EuroMaint Rail in the spring with the aim of increasing
employees’ knowledge and understanding of the business plan. The
dialogue will help increase personnel’s opportunities for realising
the business plan.
Market
Demand for both consultancy and servicing in the engineering industry
has increased during the year. In response to the increased and
altered nature of this demand, EuroMaint Industry is now strengthening
certain areas of specialist expertise such as maintenance engineering,
production engineering and service engineering. The Swedish
market for train maintenance is one of the most open to competition
in Europe. This trend has been positively affected by deregulation
and EU harmonisation, which are gradually opening the market up to
service exports.
Several of the contracts signed so far during the year are clear
proof of major customers’ continued trust in EuroMaint’s quality and
ability to deliver. EuroMaint Rail has submitted several major tenders
to its customers for rolling stock refurbishment and is processing
requests for tender regarding maintenance for the Öresund Rail
Services. EuroMaint Industry is in dialogue with both existing and new
customers with regard to extended, partnership-style collaborations in
production streamlining and maintenance development.
Impact on the environment
At all EuroMaint Rail workshops, the main effect on the environment
is to the air and water. The operation is classified as harmful to the
environment and an application must be made to the environmental
authorities. The environmental authorities decide whether a permit
or notification is required depending on the degree of risk to the
environment. If EuroMaint Rail were not to receive the environmental
permits required for production, this could harm its opportunities
to fulfil customer commitments. If permits were not granted there
is, however, the ability to restructure activities at the workshops for a
limited period to restrict the adverse financial impact.
Eleven of the EuroMaint Rail workshops require official notification
in accordance with the Ordinance (1 8:8 ) concerning Environmentally
Hazardous Activities and The Protection of Public Health.
The relevant inspection authorities for the workshops in Luleå/Svartön
and Sundsvall have judged that no notification is required. The activities
carried out by EuroMaint Rail which require notification include
vehicle washing, painting, deicing and handling diesel fuel.
In June 2006, EuroMaint Rail took over the maintenance work
at SL’s workshops in Älvsjö and Bro. Both workshops require official
notification in accordance with the Ordinance concerning Environmentally
Hazardous Activities and The Protection of Public Health.