The financial crisis in 2008 hit Elmo with full force, just as it did most companies in the automotive sector. With just over 60 percent of its sales going directly to the automotive industry Elmo soon got into difficulties that led to the company's bankruptcy. The company recovered from the first bankruptcy but it was not long before new problems appeared and the second bankruptcy soon followed in September, 2010.The new investors with their previous experience from the leather tanning industry rationalized the manufacturing process and reduced costs significantly —  “Order entry had more than halved when we returned from vacation in 2008. We had over 300 employees and it was difficult to quickly reduce costs. We were forced to let almost half of our employees go, and many others were reassigned; it was a tough time with many a difficult dialogue," says Anders Johansson. Today Elmo has a trimmed-down organization that is able to react to market fluctuations quickly. Together with the new investor, the company has performed a thorough job rationalizing the manufacturing process. New machines and robots have made the process more efficient and reduced unproductive time. “We've succeeded in drawing great benefit from each other without cannibalizing each other's markets," says Anders Johansson.

A positive trend
Elmo has made a U-turn since the bad days. You'll find the company's leather (in addition to most Volvo cars) in such places as the Emirates Stadium in London and in exclusive leather furniture stores. Sales are back at levels that are comparable to those before the crisis, and the company is investing in more strings to its bow. “We're trying to broaden our base into a number of parallel business areas in order to reduce our exposure. We need a balanced mix of products and growth between the product areas to optimize raw material usage," says John Olsson, Marketing VP at Elmo. In addition to the automotive industry, Elmo's markets include the transportation and furniture industries.

Investing heavily in the environment
The leather tanning industry is chemical intensive and requires large water resources. Elmo has had a clearly defined strategy for reducing its environmental impact ever since the 1980s and among other things this has led to a new biological treatment plant. “We've worked hard to reduce our environmental impact throughout production. Overall our focus on the atmosphere and water purification has lead to our becoming a leading player in the industry today. VOCs (Volatile Organic Compounds) per manufactured unit are less than a tenth of what the EU directive demands, and most of our water purification parameters are way better than industry standards," says John Olsson.With their history dating back to the 1930s the new owners have made it clear that Elmo will continue to stand by its brand and its investments in quality and the environment. “We will continue to invest in quality and product development in close cooperation with our customers. It's part of our recipe for the future," concludes Anders Johansson.