The new management of Mustad, the world's largest supplier of fishing hooks, has decided to reduce its Norwegian staff once again, taking it down by 30 people to a total of about 50 employees to help bring the company back to a profit. It will continue to manufacture hooks for commercial operations in Norway, but about 80 percent of its sports fishing hooks will be made in the future at Mustad's 10-year-old factory in China, which employs some 500 people, and the balance in Portugal and Brazil.
The decision was made by a new management team run by Nils Agnar Brunborg, a 51-year-old Norwegian executive with experience in financial turnaround processes who was appointed chief executive of Mustad a few weeks ago, following the recent takeover of the company by a large Norwegian investment fund, NLI Utvikling. He took the place of Lars Lemhas, a former executive of the Tetra Pak group who had been installed in 2008 by the Mustad family, which owned the famous Norwegian company before.
In the last two years, Mustad incurred severe losses as its sales declined steadily from a former peak of around 400 million Norwegian kroner (€53.1m-$66.3m) a year. In 2010 they went down to NOK 325 million (€43.1m-$53.9m) from the previous year's level of NOK 349 million, and they suffered another drop in 2011.
According to Brunborg, whom we met at the annual Efttex fishing tackle show in Paris a few days ago, the sales decline was partly due to insufficient measures to improvement the supply chain, following the introduction of a massive new information technology platform two years ago. This issue is being seriously addressed now.
With an estimated world market share of around 20 percent, the Mustad brand still enjoys a strong reputation, but it is facing a lot of competition, especially outside North America, which is its biggest market. The company intends to invest heavily in research & development and in sales to return to profitable growth.
A new global sales and distribution structure is scheduled to be approved by the end of this month. The new organization will be led by Atle Håkonsen, who was appointed a few days ago as Mustad's new vice president of sales and marketing. Coming from Svendsen Sport of Denmark, where he acted as sales manager, Håkonsen took the place of Anders Thomassen, who now works for a Chinese competitor, Wuxi Greenwave.
