German press manufacturer KBA Group has announced a ‘strategic realignment’ of its divisions that could affect up to 25% of its workforce.
In a statement the company outlined a package of measures that it said would strengthen its long-term profitability and future development potential.
“Swift and radical restructuring is intended to facilitate our development into a decentrally organised and highly flexible press manufacturing company, which, complementing its core business, is active above all in profitable niche markets,” said KBA president and chief executive Claus Bolza-Schünemann.
“With this decision, we have laid the foundations for sustainable realignment and interesting future prospects. The essential basis, however, is initially consolidation of our core business activities.”
Among the measures announced are ‘structural and process optimisation’ alongside capacity and personnel cuts in the sheetfed offset division, while web press operations will be moved to a business model based on labour flexibility, again with workforce reductions.
A ‘revised location concept’ will result in European manufacturing activities being focused on the main German sites of Würzburg, Radebeul and Frankenthal, Mödling in Austria and Dobruška in the Czech Republic. Some work will also be outsourced in an effort “to avoid parallel activities and reduce costs”, said KBA director of marketing and corporate communications, Klaus Schmidt.
He added: “The closure of the Trennfeld assembly site, 30 km from KBA’s main facility in Würzburg, has already been decided. The closure of other smaller sites at the end of the restructuring process can not be excluded.”
Schmidt said that there would be no immediate impact on KBA’s UK operation, which employs 40 people, although cost reductions could be imposed in the medium-term if profitability is not achieved.
The sheetfed, web press, special applications, including recently acquired Flexotecnica and Kamman Maschinenbau, security press and MetalPrint, divisions will be given “clearly defined profit responsibilities” with potential for further cost reductions if targets are not met.
Between 1,100 and 1,500 jobs, out of a total 6,200-strong workforce, will be affected by the restructure, with negotiations beginning directly after the New Year.
“We have made some far-reaching decisions for KBA today,” said Bolza-Schünemann. “They will also be accompanied by painful cuts for the workforce. It was not easy for us to make these decisions, but they are unfortunately imperative for the future sustainability of our company.”
The changes are expected to show their first results during 2015, with a return to sustainable profitability in 2016 at the latest, Bolza-Schünemann said.
The company cited the ongoing reshaping of the global print industry for its dramatic restructure plans, which has resulted in a reluctance to invest and “significant excess capacities across the whole press manufacturing industry”.
The sheetfed and web press markets had contracted by 50% and 70% respectively in the last few years, according to the company, with little recovery expected. Digital, packaging and special markets are the only sectors in which sustained growth is anticipated.
Since 2008 KBA has reduced its workforce by almost 2,000, amid ongoing restructures of its operations and continuing losses across its divisions.
Last month the group posted pre-tax losses of €16.3m for the first nine months of 2013 on revenues of €729.9m.
Sheetfed offset presses posted a €7.8m loss during the same period while web sales suffered a 33% slump compared to the same period in 2012.