Semperit shelves plans for US plant

Vienna, Austria – While the fate of a Semperit AG Holdings belting plant in France remains up in the air, a decision on the addition of a production facility in the US apparently has been made.

Basically, a U.S. manufacturing site is not going to become a reality. A Semperit spokesman said presently there are no plans for the company to establish a conveyor belt production factory in the country or anywhere else in North America.

Semperit's Sempertrans Conveyor Belt Technology business had been reviewing the launch of a belt production plant in the US as part of a joint venture with Shaw Almex Industries Ltd. That study began in 2015, and an official of Semperit announced the possible addition at NIBA – the Belting Association's annual meeting that year.

That announcement caught NIBA convention attendees by surprise, especially because the market for conveyor belts was down and showed few signs of improvement. Mines were closing, and restrictions on the remaining mines had become stricter.

Nonetheless, at the NIBA convention in September 2016, Boris Illetschko, head of the Sempertrans segment at the time, reiterated that the firms still were reviewing the addition of a facility to produce fabric-reinforced conveyor belts on US soil to serve as "an attractive alternative supplier for customers in the US, Canada and Mexico."

He noted that Vienna-headquartered Sempertrans' best prospects for growth were in North and South America as well as the Asia-Pacific region. Illetschko no longer holds the top Sempertrans post. He has been replaced by Markus Keller.

Semperit's spokesman did not elaborate further on the reasons the company decided not to proceed with the addition of a new factory at this time. But it's likely that poor market conditions, which have not improved since 2015, was a prime factor.

That was one of the reasons given for the possible closure of the company's conveyor belt production plant in France.

In a statement, the firm said consultations and negotiations with employees – mandatory under French law – began at the end of June at the Sempertrans France Belting Technology SAS site began at the end of June.

"The decline in the global conveyor belt market, the mining industry slowdown as well as tough competition, pressure on prices and the significant impact of raw material volatility on margins," a company spokeswoman said, prompted Semperit to raise the possibility in July that it may shut or significantly restructure its Argenteuil, France, steel cord and textile belt manufacturing facility as part of a cost-saving initiative.

A decision on the factory's future is expected by the third quarter, the spokeswoman said.

She added that Semperit made a decision 10 April to begin reviewing ways to improve profitability. In that context, the spokeswoman said, the company's management board, with the consent of its supervisory board, decided "after thorough analysis of potential alternatives to carry out cost saving and restructuring measures in relation to the production site" in France.

No other plants will be subject to the cost-cutting measures, she said, including Sempertrans' office in Levallois, France.

However, some factories could pick up additional production capacity if the facility is closed because Semperit plans to consolidate its belt production into one site in each of its regions.

If the facility is shut down, about 64 jobs will be impacted, she said.

Sempertrans will continue to sell conveyor belts to the North American market, the spokesman noted. Most of those are produced at its plants in Europe, he added.