Permascand is an engineering and manufacturing company that has been supplying electrodes with catalytic coatings to the electrochemical industry for more than 50 years. The head office and manufacturing are situated in Ljungaverk in northern Sweden, and the company’s solutions have a wide range of applications, including water treatment and the production and storage of renewable energy.
The company was acquired by private equity firm Norvestor in 2015. It was then, when they were looking for senior executives to build the company, that they came across Peter Lundström.
Peter describes this first meeting as a defining moment. “I saw something that was like a diamond hidden down a mine. It was not really polished, but it could be a beautiful stone if it was under the right leadership and was developed.” Peter decided he was the one to polish that stone, joined the company as a shareholder, and in 2017 took the leadership role.
On becoming CEO, Peter focused on leadership. He describes how he began changing the culture by adjusting the vocabulary around the work the company does. “We have a few mantras in the business, such as ‘Safety starts with me’. These mantras are underpinned by the idea that it doesn’t matter where you’re working in the company; we all have a responsibility.”
As well as embedding a language of shared ownership, Peter began a culture of innovation. “We normally never start with a budget; we start with an idea. We need to feel that we can do whatever we want. And so, we created an environment where we don’t start with the hurdles because there will always be hurdles.”
These cultural changes were not only good for his staff; Peter knew they would be good for the long-term future of the business. “Good culture brings good value for shareholders and makes a platform for growth because that is what we are aiming for—growing and making money. That’s our ultimate goal.”
Like all of us, Permascand has had to manage its way through the global pandemic, but a combination of factors meant the company fared well. “Because we have a network around the globe, we got early signals from China that something was going on. We rescheduled some of the materials that normally go by boat and took them by train instead. So that was kind of the starting point of this whole game. Because one month later, it was a lockdown situation.“
Even with advance warning, some of Permascand’s markets were hit hard. Peter’s management team held daily meetings and undertook scenario planning for the possibilities that could potentially unfold. “We looked at risk and opportunities, with one goal: focusing on customers and making sure that we could continue to deliver. If we can deliver and sell, we will get paid, and we will get cash flow. And we can keep it going.” The team worked closely with their supply chain partners to make sure they were taken care of too. “We made sure that all the suppliers got paid promptly. We didn’t want them to suffer more than necessary.” The company survived the first year, and by the second year, things were much easier.”
We still have this crisis management alert, but we are in a pretty good situation at the moment with suppliers. So there is no immediate crisis. But if things start to get bad again, we know how to manage it.
Now they are through the worst of the pandemic, Permascand can look to the future. The company has multiple opportunities that it is exploring, starting with the water treatment sector and a range of products that Permascand is certified to deliver into this market. “It’s a journey that will end with new installations around 2025/26. And then it will be an aftermarket and service business. Hopefully in the same way as the industrial side is today.”
Permascand is also focused on sustainability and green transition. They are investing heavily today in renewables. “We’re aiming to reduce CO2. The future is all about hydrogen. So we are investing into the markets, into the products and the components, into R&D. We are hiring a lot of skilled people, both for R&D and design and construction.
We want to manufacture these types of products in a large-scale environment.” While it’s relatively easy to produce a dozen or so of these new products, Permascand is looking to produce tens of thousands of these new components, which need to be specified in the same way. It’s a huge project. “The strategy is to grow into the electrification and renewable side long term and utilize the growth we have in other sectors to reinvest our earnings.”
These kinds of innovations would not be possible without strong partnerships with suppliers. “We are in the metal business when it comes to suppliers because we are buying a lot of titanium, copper, nickel, and precious metals like ruthenium and iridium. If we were not closely linked and had less of a partnership model, it would be really difficult for us to operate.”
Working in partnership with suppliers becomes much more than a buying and selling relationship; it becomes about innovation, product development, and even process improvement. “In the last ten years, we have worked with suppliers to find a more standard approach because we have long lead times in our product but need short deliveries as well. And that has been the biggest challenge for this industry. If we miss business opportunities, it also means our suppliers are missing a business opportunity. Standardizing means it is easier for suppliers to supply to us.”
Incredibly, Permascand has 6500 suppliers in total, but only ten of those deliver 97 percent of the business. “Five of those are really, really critical to our success. And out of the five, three of them are really, really, really hard to change because they do have something certified or something that is a bit of a lock-in situation.”
After a few years at the helm, Peter considers the attributes that separate Permascand in the marketplace, and he puts it down to three key factors. “First, I think it’s our flexibility and knowledge about the customers’ processes.” By flexibility, he means that the company can change the way it is operating or producing remarkably quickly. Secondly, having a lean and agile team facilitates nimbleness and also means decision-making is faster. The third factor is their service and quality. “We produce quality products and quality components that last a very, very long time. Good quality means less maintenance, fewer interruptions, and that we can sell our products with eight- to ten-year guarantees.”
Even though the company has been around for 50 years, Peter believes they are still at the beginning of their journey. “We are trying to improve every day to deliver high quality and be very, very easy to do business with.”