He said owners are satisfied as Norma is sustainable and competitive. «Alas, not on the belt market any longer,» admitted Mr Siimon.
He said one can only play in the game if a company has development. In a large group, development is concentrated in large hubs – research centres, institutes.
«We do not have that in Estonia. We only have a team which participates in the development phase in certain projects,» said Mr Siimon.
In the segment, competition is tough. Mr Siimon says China has become a major competitor with increased quality and speed of adoption of new products.
«But our products are so specific that few are the players,» said Mr Siimon.
Owner of Norma a global player
Norma is owned by the global maker of vehicle safety equipment Autoliv registered in Delaware, USA and headquartered in Sweden.
The company turned seriously global in 1997 after merger with the US enterprise Morton (as we know by now, it actually took it over).
The products include airbags, safety belts, steering wheels, passive and active safety systems as radars, night cameras and such like.
Last year the group showed $9.2bn in turnover, meaning that Norma yields less than 1 percent of total turnover. Meanwhile, Autoliv makes 143 million safety belts meaning that a third of the group’s safety belts come with buckle-tongues made in Norma.
The group has operations in 28 nations with a total staff of about 60,000. Parts are produced for 100 brands and 1,300 models globally.
Autoliv shares trade at New York and Stockholm stock markets. The company is a good dividends payer and these past five years the shareholders have been paid a steadily growing sum.
Norma ready to pay dividends
Withdrawn from stock market a bit over five years ago, Norma’s share used to be a investor’s favourite as the enterprise paid a stable and diligent dividend and it’s yields were among the best in Tallinn.
True, with lots of free cash on the company’s balance sheet, some shareholders were dissatisfied demanding for more. A leading activist investor was the hedge fund Gild Arbitrage – by now liquidated – which was the only investment corresponding to the name of the fund (arbitrage is seeking ways to earn money from market inefficiencies). Of the other investments of the fund, the Armenian gold prospects were the most (in)famous.
The investors were indignant as, instead of returning the money to shareholders as dividends, Norma preferred to hold it as deposits or lend to parent company.
The controversy with activist investors was solved after Norma was completely taken over and taken of stock market, while recently Eesti Ekspress cited it among companies who avoid income tax.
True, after being delisted, Norma has no longer paid dividends to parent company and at end of last year parent company’s obligations before Norma stood at €24.5m.
Norma chief Peep Siimon says that, for a short while, parent company is paying higher interests on loans than deposits yield in commercial banks.