Investment with Sanok Rubber Company
In November 2024. The Polish International Development Fund 2 Closed-End Investment Fund entered into an investment agreement with Sanok Rubber Company, whereby the Fund acquired a minority stake of 30% in the share capital, of SRC’s Finnish subsidiary - Teknikum (Teknikum Yhtiöt Oy).
Company profile
Sanok Rubber Company is a European leader in the production of rubber products, rubber-metal products and combinations of rubber with other plastics. It has been operating in the market for more than 90 years. Since 1997, the company has been listed on the main market of the Warsaw Stock Exchange. The products offered by Sanok Rubber Company are used in many industries, including automotive, construction, agriculture, pharmaceuticals and the manufacture of household appliances.
The Sanok Rubber Company Group is present on foreign markets, from where nearly 70 per cent of its revenue comes. In 2024, the company was awarded the prestigious ‘Investor without Borders’ award, which is given to the most successful Polish investors who develop their business through expansion into foreign markets.
Sanok Rubber Company conducts its business activities in a socially responsible manner, focused on sustainable growth with the highest attention to aspects related to health and safety at work, protection of the health and quality of life of its employees, respect for and protection of the environment.
Motivations of the company to expand abroad
As part of its business operations, Sanok Rubber Company is committed to diversification, both product-wise and geographically.
From the Polish company's point of view, the purchase of Teknikum shares supports the company's long-term strategic goals. Teknikum, the Finnish group involved in the transaction, operates globally and manufactures its products in Finland and Hungary. Teknikum's product range includes specialized industrial hoses, e.g. for purification systems used in the mining industry, rubber compounds, moulded products made of rubber, silicone and plastics for technical applications, as well as solutions for protecting industrial equipment against wear and corrosion, so it complements the production profile of the Polish company.
Choice of expansion destination
Finland is characterized by a business-friendly environment, as evidenced by the country's high position in rankings of economic competitiveness and innovation. Finland ranks 6th out of 132 economies in the Global Innovation Index and 12th out of 184 countries in the latest Index of Economic Freedom.
The country's strengths typically include a highly educated workforce, an innovative, knowledge-based economy, a positive reputation and a high-tech, research and development orientation. Finland also offers extensive experience in ICT and new technology. In recent years, the country's government has announced a number of tax incentives for foreign investors to conduct R&D activities in Finland, although at the same time inward foreign investment is monitored in detail by the Finnish government.
FDI inflows to Finland have fluctuated in recent years, which is related to the geopolitical situation. According to the latest OECD data, FDI inflows to Finland amounted to USD 859 million in the first half of 2024, compared to a negative inflow of USD 8.68 million in the same period a year earlier.
Finland can also be an attractive destination for Polish companies. Although Poland is Finland's 7th largest trading partner and accounts for 3.6% of Finnish imports and 3.4% of exports, Polish direct investments in Finland are small. In 2023, Polish FDI in the country amounted to PLN 38.2 million, while the balance of Polish FDI receivables totalled just under PLN 475 million at the end of 2023.
Benefits of expansion
Strengthening its presence in foreign markets is a key element of the company's growth strategy. By expanding into new geographies, the company can increase its revenues, build a stronger brand and gain new customers. Expansion also allows the company to diversify its risks and take better advantage of global economic trends. In the case of Sanok Rubber Company, the investment in Finland has helped to increase revenue diversification. The figures after the three quarters of 2024 confirm that, as a result of the Teknikum acquisition, the Sanok Rubber Group has recorded a significant increase in sales in the industrial segment.