Investment and research and development projects
General information on investments
Investment projects have been drivers of engineering development and a source of competitive advantage. Investments are planned within a several-year horizon of a strategy, which are further verified every year for the possible market changes. Decisions on the performance of major projects are made based on detailed analysis of each task, in consideration of their effectiveness, rate and period of return, and risk level, and are preceded with assessment and recommendation by the Investment Committee operating with the Central Area.
The investment projects carried out by the Capital Group within 2021-2025 Strategy are mainly focused on the Capital Group organic development. They comprise specifically improvement of production capacity by construction and extension of production halls and warehouses, as well as furnishing the halls with state-of-the-art production lines. All that occurs in response to the growing customer requirements, changing legal regulations, as well as care for the natural environment and staff safety. Adequate funds are also allocated to maintenance of the existing production capacity, by replacement, modernisation, or improvement of effectiveness (replacement projects). Within the last 10 years, capital expenditure of the Capital Group amounted to roughly PLN 2.5 billion.
Investment projects in 2022
The Capital Group expenditure on investment projects equalled PLN 309.5 million, compared with PLN 218.5 million in 2021, representing growth by 42% y/y.
Within the EPS, capital expenditure amounted to PLN 163.9 million and comprised mainly the construction of a new production hall and two extrusion presses with tools and accessories (dies) intended for current orders servicing. The value of investments at the ASS amounted to PLN 130.7 million in 2022, and comprised mainly the purchase and installation of a new vertical paint shop, purchase and installation of fire glass production line, and modernisation of warehouse infrastructure. The FPS capital expenditure reached PLN 9.6 million and covered mainly replacement projects. Grupa KĘTY S.A. expenditure on investment projects in 2022 equalled PLN 130.2 million, compared with PLN 56.8 million in 2021, representing growth by 129% y/y.
The description of the major investment projects carried out in 2022 by the particular Segments may be found in section ‘Operating activities at the business segments’.
In 2022, the Capital Group did not make any capital investments.
The 2021-2025 Strategy of the Capital Group assumes capital expenditure of PLN 1.3 billion, out of which PLN 387 million is planned for 2023. The projects will be financed from the Company own funds and from bank loans. Considering the current financial standing of the Capital Group, safe debt and liquidity rations, as well as the bank finance acquired in 2022, as at the date of this report the Management Board of the Company does not expect any problems with financing the planned investment projects.