According to leading pipe manufacturer Uponor (Kimmeltie 3, FIN-02110 Espoo), 1995 was an "exceptional" year for the company, but not for the reasons it would have hoped. In line with results announced by other companies supplying building products, the group saw turnover fall by 2.7% to FIM 3.6bn on the previous year and profit before tax slump 22% to FIM 193m. The group's leading market is Germany, which accounts for 27% of sales, and a sharp fall in orders during the autumn of last year was one contributing factor to the disappointing results. In the Nordic countries (23% of sales) demand continued weak in Finland, following the trend of the past two years, whilst in Sweden demand fell even further. Markets were also slow in the UK, France and southern Europe, although there was strong growth for Uponor's pipe products in Eastern Europe.

The fluctuating price of polymer materials last year, obviously had a major impact for a business where raw material costs are a key consideration. There was something of a knock on effect within the pipe sector as customers built up stocks whilst prices were rising, but then reduced inventories when prices fell and markets weakened.

The group's main areas of business are in hot water pipe and sewerage systems (both accounting for approximately FIM 1.2bn of turnover) general building pipe (FIM 606m) and gas pipes (FIM 440m). The company has good expectations for its hot water pipe business following the decision in Germany to ban a certain copper pipe installation method and the withdrawal of a rival PBT resin in North America following a series of product failures. This is expected to considerably boost sales of Uponor's cross-linked polyethylene pipe for hot water systems in America. For most of its other businesses though growth is more dependent on general economic trends where the outlook is less certain especially in Germany where the building industry remains depressed.

READER SERVICE: Uponor's 1995 annual report (in English): PIE-No. 39466.