VICI Industri
The company today
VICI Industri in Skövde is undergoing rapid expansion. The company supplies parts to the auto industry, where it faces razor-sharp competition and tough demands on quality and reliability. Despite its small size, VICI has stood out in recent years as it has added both Volvo and Scania as customers.
In the fall of 2006 VICI received its largest order to date, to produce valve rocker systems for Scania’s truck engines. This order, worth SEK 50 million a year, required a significant increase in production. A new production line was added at the same time that the company’s facilities were expanded. By mid-year 2008 everything will be completed and VICI’s revenues will have increased by 50 percent.
To handle the Scania order, VICI needed outside capital. In the spring of 2007 Industrifonden became an owner by participating in a financial package worth SEK 50 million together with Almi and Provinsbanken.
Background
Founded in 1991, VICI Industri has supplied car parts for many years. But it wasn’t growing or profitable. In 2004 it was acquired by Thomas Fröjd and then things started happening.
“I saw that the company had great potential,” Thomas Fröjd said. “There was tremendous knowledge and experience among the employees that just had to be utilized the right way.”
The first thing he did was secure an order worth SEK 25 million from Scania. To handle it, however, he and the management were forced to introduce a new culture. The new priorities were cost- cutting, efficiency and motivation.
“It’s not much different from managing a football club,” he said. “You have to set clear objectives, encourage and motivate, and be willing to change what isn’t working.”
Thomas Fröjd has a clear agenda: he wants to turn the company around. And he is well on his way to succeeding. VICI now operates at a profit. Revenues have increased from SEK 35 million to SEK 110 million in three years.
What did Industrifonden offer?
When Thomas Fröjd started looking for capital and a new owner to join the company, he sought a long-term industrial investor. “I found one, after looking for a year, in Industrifonden,” he said. “The Industrifonden brand gives us stability and credibility in our discussions with large customers. They add competence to our board and provide us with access to an extensive network of business contacts.”
Next step
VICI will ramp up its new production line and continue to improve efficiencies so that it can offer even better, less expensive products to demanding customers in the auto industry. It also has to keep working on its corporate culture.
Thomas Fröjd’s opinion is clear: “Shifting operations of this type to low-cost countries instead of meeting the competition by automating, training and cutting excesses is lazy management.”
Future outlook
VICI will continue to grow – organically and through acquisitions. The goal is to be even bigger and more profitable.
Tripling revenues by 2010 is clearly within reason. Thomas Fröjd instead is contemplating whether revenues couldn’t be increased five-fold, up to SEK 500 million, by 2012.