1987 - Year of the shrinking market?
Like most big Swedish multinationals, Alfa-Laval is in a strong financial position. The profitability decline, caused by the agricultural crash of 1984, has been reversed. The stock price has out-paced the general index in Stockholm and the company's liquid assets exceed Skr 2 billion ($288 million).
"Alfa-Laval has been and is still almost completely self-financing,' said Bo Andreasson, the company's finance director. "We have never even had a Swedish bond on our books, nor do we have any plans for investing in Eurobonds.'
Andreasson's department is regarded as one of 12 distinct business areas within Alfa-Laval, and therefore, is expected to be a profit centre. The finance department has created a number of legal entities which include Alfa-Laval Bank (responsible for liquidity management in the Swedish sector), Alfa-Laval Credit (leasing company), and Alfa-Laval Export and Import Finance. "During the last few years, we have obtained a higher yield on equity in the finance area than in traditional operations,' said Andreasson.
Following the example of Volvo and Swedish Match, Alfa-Laval established its first foreign financial centre, ALFINAD, in Belgium this year, with a share capital of Skr250 million ($36 million).