Blum increases sales by 25% despite supply chain challenges that hit delivery times

Blum has reported a 25% increase in turnover despite supply chain challenges that have forced it to extend its delivery times by an average of two weeks.

The family-owned fittings company based in Hoechst, Austria, explained in an online press conference today that these positive results were achieved against a backdrop of supply chain delays, increases in raw materials costs and the upsurge in consumer demand that followed the Covid lockdown last year.

Answering a question put to him by kbbreview during the live event, joint managing director Philipp Blum said: “We would like to do more but delivery times have had to be lengthened by on average two weeks. We have achieved growth of 25% but it has been very challenging due to external factors we cannot influence.”

Answering another direct question during the Q&A session, he added: “It helps that we have suppliers that are very close by and we have on-site warehousing. We source very few parts from Asia, but we do need the raw materials.”

Joint MD Martin Blum also picked up on that point during his presentation: “Only by adjusting some delivery times have we been able to meet the rapid growth in market demand. The price of steel has almost doubled; plastic, packaging, zinc and aluminium have also been subject to enormous price hikes. We see a similar situation in the field of transportation. The whole international supply chain is under pressure. In some cases, overland and ocean freight costs have increased dramatically. The current situation is very challenging, but we’ve managed to create a certain level of stability thanks to our longstanding partnerships with our suppliers.”

Martin Blum

Despite the supply chain challenges the company has faced, Blum managed to increase sales in the financial year to June 2021 by 24.7% (€470 million) to €2.38 billion (£2.03bn).

Martin Blum acknowledged that the post-lockdown surge was largely behind this. He said: “The crisis has prompted people all over the world to attach more importance to their homes. At the same time there has been a shift in private consumption – away from traditional leisure time activities to investments in home improvements, for example in kitchens and furniture.”

During the Q&A session, Philipp Blum added: “We believe people will continue to attach importance to their homes. We don’t think that will come to an end, although we will have see what the long-term effects are and watch the global economy.”

Blum recorded strong growth in Western Europe, particularly Italy, France, the UK and Germany. But it also saw major increases in Eastern Europe, in Poland, Russia, the Czech Republic and Turkey. It also had a positive year in Africa, South America, and the Near and Middle East. Almost half (44%) of its sales were within the European Union and 13% in the USA, which is its largest single market.

At the year end, Blum employed 8,778 people worldwide, with 371 new employees recruited at its Vorarlberg HQ. The company also took on 93 new apprentices.

The company invested €259m to expand its buildings, machinery and facilities. It will expand its Bregenz plant with 49,000sq m of extra space this summer, while the Gaissau plant will get a 20,000sq m extension by mid-2023. Its Polish plant will be extended by autumn 2023 and its new factory in China is scheduled to be completed by early 2022.

Philipp Blum

The company said it believed that continuous investment in innovations and services is what will safeguard its future success. It gave as examples its Blum Connects hybrid event to mark Interzum, and on the product side its Revego pocket system and Aventos HKI fittings that remain ‘hardly visible’ even when a cabinet is opened.

Looking ahead, both MDs said they believed that international supply chains will remain “severely impacted” for some time to come.

Philipp Blum concluded: “We hope that the high vaccination rate will avert the need for further lockdowns. We’ve benefited from the experiences that we as a company have gained over the last one-and-a-half years. Digital technologies offer many opportunities, but they’ve also shown us that you cannot replace face-to-face conversations and an exchange of ideas.”

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