VMC, Rapala's hook manufacturing unit, has decided to establish a production line in Indonesia. The site will be located near the group's lure manufacturing facility on Batam Island, a special economic zone set up by Indonesia and Singapore.

The factory will mainly produce single hooks and serve Rapala's lure manufacturing sites in Asia as well as Asian hook customers. Both the lure and hook facilities on Batam Island are scheduled to start in the fourth quarter. The lure factory will employ 150-200 people and will run parallel to the group's Chinese manufacturing business. The hook site is due to employ about 50 people within a year.

In September, the group completed the announced merger of its U.K. distribution activities with Shimano in an equal joint venture, Shimano Normark UK. The group has also finalized the relocation into larger premises of the Finnish cross-country ski manufacturer Peltonen.

In the meantime, Rapala finished the third quarter with a 4 percent rise in sales to €63.0 million lifted by fishing products. Adverse foreign exchange rates knocked €1.9 million off turnover.

Sales of fishing products rose by 11 percent to €32.8 million driven by fishing lines and Dynamite Baits' products. The turnover of other group products fell by 12 percent to €5.1 million following a decline in gift products. Sales of third-party products were down by 1 percent to €25.1 million, hit by lower sales of hunting goods, which were not offset by an increase in outdoor products.

By region, North American turnover increased by 3 percent to €13.1 million. Revenues in Nordic countries declined by 6 percent to €20.5 million while sales in the rest of Europe increased by 15 percent to €27.9 million. In the rest of the world sales were down by 4 percent to €18.7 million.

Overall revenues have to be adjusted to intra-group sales, which reached €17.2 million in the third quarter.

Excluding non-recurring items, the Ebit margin slipped to 4.5 percent in the quarter from 5.1 percent a year earlier. The reported margin slumped to 3.6 percent from 4.8 percent as the operating profit fell to €2.3 million from €2.9 million.

Fishing products contributed only €1.6 million to Ebit against €0.7 million a year earlier. Other group products generated an Ebit loss of €0.2 million compared with €1.1 million profit a year earlier. Third-party products booked a decline in Ebit profit to €0.9 million from €1.1 million.

Group net profit shrank to €0.2 million from €1.4 million.

Rapala confirmed that it expects full-year sales to be higher than in 2010 but warned that the Ebit margin, after onetime costs, will be lower. At the end of the second quarter, the group was expecting the margin to remain stable.

Presales of winter sports equipment for the coming season have been higher than last year. But the company stressed that it will increase its emphasis on prudent credit, cash and inventory management due to the re-emergence of uncertainty regarding the global economy. Nevertheless, Rapala pursued talks regarding acquisitions and business combinations during the third quarter.