RK Metals cuts new market niches

"One can consider that a new age has begun in the history of the company this year, opened up by machines purchased with the help of the Investment and Development Agency of Latvia (LIAA) and Norwegian financial mechanism programme called Norway Grants — 3D coordinate measuring machine allowing for measuring geometric deviations and shape of parts, as well as other new metal processing machines," thus the current situation is depicted by Artjoms Fokejevs, Member of the Board of the LLC (SIA) RK Metals. He admits that within two years’ time, the company has established a team of engineering technical specialists, which can both develop engineering technical solutions for various sectors of mechanical engineering as well as for clients. This also means the growth of the company’s net turnover.

Started off with construction elements

"Beginning and the initial foundation of the company is the manufacture of metal processing products necessary for construction implemented by the parent company, i.e. AS (JSC) UPB, and this still accounts for a lion share of all orders," tells A.Fokejevs. However, he admits that the proportion of construction (mainly, facade) elements gradually decreases in total production, since several new product groups are being developed. "Previously, we were able to manufacture products created by others, but today, we are able to manufacture products developed both by our engineers and engineers of other companies," stresses A.Fokejevs. He points out that currently, thermal load and wind load solutions can be developed for all elements, while previously nothing like that was possible.

Parts for mechanical engineering

Other area of activity of RK Metāls consists of mechanical engineering structures and parts, where, according to A.Fokejevs, 2015 can be considered the year of serious involvement. "Because we did not have appropriate measuring machines, which we purchased only this year," A.Fokejevs answers, when asked as to why this field was not developed earlier on. He points out that during the work with a mechanical engineering part and, especially, in the sphere of structures, it is important not only to be able to manufacture, but also to be able to verify the geometrical accuracy of the final product. "We supply various parts to various companies, including those operating in Latvia, for example, Butcher Municipal, which operates in Ventspils," says A.Fokejevs. He points out that the new areas of activity will allow the company to increase the total net turnover as well.

Work for the oil platforms

Another comparatively new sphere is called ‘products for oil platforms’. "The first product in this sphere was non-standard size containers for the installation of particular units — pumping stations, power stations,” explains A.Fokejevs. He also points out that along with the development of oil and gas extraction in seas, the demand for such platforms and equipment thereof could only grow. "We cooperate with engineering technical companies, which have developed their own solutions, but lack production opportunities, as well as with the companies, which manufacture such platforms, but are unable to manufacture the necessary elements," A.Fokejevs replies when asked about the company’s range of clients. So far, nearly twenty such non-standard containers have been manufactured in total. Currently, the company wants to expand this experience also to the fire extinguishing equipment. "Currently, we are working together with the designers of fire service technologies to offer our solutions and products," says A.Fokejevs.

Cuts new niche

Although the production of custom products is not a bad business, the company has set a different goal — to offer its own products in the market. "The first of these products has already been developed: scoop grippers for construction excavators, forestry and logging and wood transportation machinery," A.Fokejevs describes the future plans. He adds that this area of activity has arisen after the development and manufacture of technical solution of a scoop gripper ordered by a Dutch company. "Trace of the product was lost somewhere in Africa, but simultaneously, we concluded that we were able to manufacture also this kind of products,” says A.Fokejevs. He also does not make a secret of the fact that no target market has been outlined, therefore such products can be manufactured for both local and foreign clients. "German quality for Latvian prices and opened to any novelties," A.Fokejevs answers when asked about potential differences of these scoop grippers from the products of competitors. In his own opinion, such a direction is prospective; however, only the first step has been taken towards this direction. In its turn, the established team of constructors and engineering technical specialists allows for the development of specific solution and manufacture of the respective machines. "Besides the scoops, an automation project for gypsum processing plant, i.e. supply of gypsum balls to the saw, was also developed. It showed itself in a favourable light, and this means that we are able to work successfully at such a level," points out A.Fokejevs. He makes no secret of the fact that the highest added value should not be searched for in the field of production of ready products created by others, but in the development of specific solutions and products and production thereof. "Parts are being produced in thousands and millions of copies, and clients are often looking for manufacturers, which could produce them, but with the lowest possible costs," A.Fokejevs replies when asked as to why the development of engineering technical solutions was accentuated. He admits that this is not an easy market niche; it is full with powerful competitors, especially in the old Member States of the EU; however, this niche is not widely spread in the Eastern Europe. "Once we were able to develop not only mechanical, but also electric and electronic solution, the opening sight was promising," stressed A.Fokejevs. Although this is not a major project, it gives confidence that the company is able to implement also projects of this level. RK Metals obtains new customers through both the network of contacts of the parent company, i.e. A/S (JSC) UPB, and the participation in the trade missions organised by the Investment and Development Agency of Latvia, as well as by attending various so-called fairs of this sphere.

Maris Kirsons
Source: Dienas Bizness