Sustainability Driving Profitable Growth in Services

At Copperberg’s recent event, Fredrik Fogelklou, VP of Parts & Logistics Solutions at Kalmar, outlined a clear path forward: embedding sustainability into service offerings can drive long-term profitability and resilience.

Kalmar’s approach reframes sustainability from an environmental checkbox to a core business strategy. By focusing on solutions like predictive maintenance and equipment refurbishment, the company proves that sustainability and profitability can—and should—work together.

The stakes are high, but the message is simple: sustainable services create value for both customers and the bottom line.

The Challenge: Cyclical Revenue Streams in Equipment Manufacturing

Manufacturing heavy equipment is resource-intensive—and volatile. Demand fluctuates based on market trends, creating boom-and-bust cycles that make long-term profitability difficult to sustain.

Here’s the issue at a glance:

• Resource-heavy production: Large mechanics require significant amounts of steel, energy, and labor, making each unit a major investment.
• Demand volatility: When orders dry up, production halts, straining revenue streams.
• Service shortfall: Currently, services account for only 28% of Kalmar’s revenue, meaning most of their income is tied to unpredictable equipment sales.

This dependency on new equipment sales also makes it harder to compete with low-cost manufacturers focused solely on price.

The Solution: Sustainable service models (such as predictive maintenance, spare parts, and refurbishments) offer a more stable revenue stream. 

Kalmar can provide lasting value, insulating itself from market swings by helping customers extend the life of their machines and avoid costly downtime.

The Shift: From Product Sales to Service Innovation

To stabilize revenue and create sustainable growth, Kalmar has shifted its focus from one-time equipment sales to innovative service offerings. At the core of this strategy is iRecommend, an AI-powered tool designed to revolutionize preventative maintenance.

How it works:

• Data-driven predictions: The tool analyzes real-time data from connected machines to predict when parts will wear out.
• Proactive maintenance: Instead of waiting for a breakdown, customers receive timely recommendations to replace components before failures occur.

The Impact:

• Reduced downtime: With unexpected failures prevented, customers experience less disruption and increased operational efficiency.
• Cost savings: Proactive part replacements lower repair costs and extend the lifespan of equipment.

The results speak for themselves:

• Over 13,000 connected machines feed service data into Kalmar’s system.
• 1,300 technicians across customer sites contribute valuable maintenance insights.
• The iRecommend tool has already generated millions of euros in additional service revenue.

Kalmar is smartly investing in better service models, which support their customers and give them an edge over the competition. Preventative maintenance has evolved beyond just a service and is now a key factor in boosting profitability and sustainability.

The Solution: Refurbishment as a Sustainable Alternative

Building new equipment is resource-intensive, and the environmental impact adds up fast. For example, producing a reach stacker releases a significant amount of CO2, with 62% of emissions coming from steel alone. 

But what if you didn’t need to build a new machine every time? Kalmar’s refurbishment program takes that question seriously.

A Three-Tiered Approach:

Kalmar offers three refurbishment options to fit different needs:

• Bronze: A basic refresh, replacing worn components to extend usability.
• Silver: A more comprehensive overhaul, upgrading key systems for improved performance.
• Gold: A complete refurbishment that restores the machine to “good as new” condition, inside and out.

Why Customers Are Choosing Refurbishment:

• Faster turnaround: A fully refurbished machine is ready in just 12 weeks, compared to waiting over a year for a new one.
• Cost-effective: Refurbishments cost 70-75% less than purchasing new equipment.

Take the reach stacker, for example. Kalmar can rebuild the machine with high-quality parts while keeping the sturdy steel frame intact. The result is a machine that’s just as reliable as a new one but at a fraction of the cost.

For customers who aren’t ready to invest in electric infrastructure, refurbishment offers a smart alternative: fewer emissions, faster delivery, and lower costs. 

Kalmar’s program shows that sustainability doesn’t have to mean compromise—it can mean smarter, more efficient solutions that benefit everyone.

The Net-Zero Vision: Long-Term Sustainability Targets

Kalmar’s sustainability roadmap is ambitious yet clear, aiming to achieve net-zero emissions by 2045. To stay on track, the company has set key interim goals, including CO2-neutral operations by 2030 and a 40% reduction in value chain emissions.

This vision isn’t just about what happens inside Kalmar’s factories—it’s about what happens after their machines leave the production line. 

Kalmar has focused on services like preventative maintenance and refurbishment, which help customers extend the lifespan of their equipment. In turn, this directly reduces emissions associated with new production.

The longer a machine stays in operation, the fewer resources are needed to replace it. This means customers can meet their own sustainability targets while getting more value from their investment.

Kalmar’s commitment shows that sustainability is, above all else, about building smarter systems that work better for everyone. When services are done right, they help businesses grow while contributing to a more sustainable future.

Customer-Centric Value: Aligning Profitability with Sustainability

While boosting internal efficiency is important to Kalmar, its service strategy is about delivering real value to customers. 

Improving machine reliability and minimizing downtime allows Kalmar to help customers avoid costly repairs and extend the lifespan of their equipment. As a result, long-term expenses are reduced, and customer loyalty grows.

As Fredrik Fongelklou emphasized, sustainability is a competitive advantage. Service solutions like preventative maintenance and refurbishments give customers more control over their operations while aligning with their sustainability targets. 

The result? A win-win scenario in which businesses thrive, customers benefit, and environmental impact is reduced.

Closing Thoughts

Kalmar’s approach demonstrates that sustainability and profitability can support each other and that there doesn’t have to be a constant tug-of-war. By embedding services like preventive maintenance and refurbishment into their strategy, Kalmar has shown that smart, sustainable practices can drive long-term growth.

For manufacturers, the main takeaway is that service innovation should be a core part of any sustainability strategy. Extending the life of equipment not only reduces environmental impact but also strengthens customer relationships and stabilizes revenue.

Just as Kalmar has redefined the customer experience, businesses must rethink how they deliver value and ensure that sustainability is built into every step of the customer journey.