No job cuts as Arburg turnover drops 38 percent

ERJ staff report (PRW.com)

German injection moulding machinery producer Arburg claims it is the only major injection moulding machine producer that did not lay off staff during the recession, despite turnover dropping 38 percent to €214m in 2009.

Announcing the 2009 result during its Technology Days open house at its Loßburg headquarters last week, managing partner Michael Hehl said: “As a strong family company with a solid company policy, we have been able to withstand this difficult time without dismissals and therefore have highly qualified and highly motivated employees available for the future.”

During the year, turnover fell to around €214m. This follows a 16 percent decline to €344m in 2008.

In regards to a recent statement from the VDMA association of German plastics and rubber machinery, which says incoming orders in the industry increased 35 percent in the fourth quarter, Arburg “had not done much worse”, sales director Helmut Heinson told European Plastics News. Orders in the period went up by around 30 percent, he said.

Although Hehl did not reveal figures in regards to sales from Germany and abroad, he did state that the share of incoming orders received at the headquarters company in Germany shrank from 49 percent to 41 percent, while the share of orders taken by Arburg's foreign sales subsidiaries grew from 42 percent to 50 percent.

Arburg experience a marked drop in sales of machinery for automotive applications, and a less severe decrease in sales of machinery for medical and packaging applications - the company's main markets. The German market had been “very difficult”, but sales in Asia, particularly in China, and in South America were “hardly affected”, Heinson revealed. In Europe, there was a marked shift in sales to central and eastern Europe.

In the US, a major market for Arburg, data from the Society of the Plastics Industry (SPI) are now pointing to a revival, he added.

Heinson described the Asia market as difficult, despite good sales, because of local competitors. While Arburg has been active in the India market for three to four years, this market of around 2,500 to 3,000 machines per year should be put into perspective against the much larger Chinese market of 30,000 machines per year market “in normal times”, he said.

He added: “India has similar dynamics as China and Arburg is competing in India with low priced machines from local producers as well as with other European and Japanese suppliers.”

Arburg currently has no plans to produce in China and confirmed again that half of its customers in the country are now Chinese owned companies.

From PRW.com (A Crain publication)