Voith's Bundling Plan to Adapt Rough Market Conditions - Papermart

Voith's Bundling Plan to Adapt Rough Market Conditions

February 2, 2015
Long-term diminished market volume for new machines and major rebuilds has forced Voith Paper to go for a package of measures intended to adapt the company’s European structure to the market conditions. Under these measures, the concentration of the paper machine business in Heidenheim and stock preparation in Ravensburg are on the cards. The goal is a lean, customer-focused organization. Voith Paper is also planning reduction of approximately 1,000 jobs worldwide under this bundling of business activities.
“The market volume for new systems has shrunk in half. This is going to stay that way, which means that revenues from this market will not be coming back,” says Voith Paper CEO Bertram Staudenmaier. “The consequences for our new machines and rebuilds business are significant. In this much smaller market, we are faced with strong competition and price pressure. The decline in order volume in recent years has had a very strong effect on capacity utilization, sales, and profits. Therefore, we must adapt to the changed market conditions.”
Planned is a bundling of the European paper machine business in the Heidenheim location and the stock preparation activities in Ravensburg. This will be accompanied by the termination of the paper activities in St. Pölten, Austria (reduction of approximately 150 jobs) as well as the closure of the locations in Krefeld and Neuwied (with a reduction of approximately 200 jobs and a transfer of remaining activities to Heidenheim). Also planned is an adjustment of the capacities in Ravensburg (reduction of approximately 150 jobs) with a closure of the manufacturing currently located there. In the future, the Ravensburg location will be operated exclusively as a competence center for stock preparation and roll services. Also planned is a reduction of approximately 300 jobs at the Heidenheim location, which will also affect employees in manufacturing. Overall, the package of measures plans a global reduction of around 1,000 jobs at Voith Paper.
“This step is painful for everyone involved, but necessary in order for us to become a lean organization, especially in our projects business in Europe. We must be appropriate to the market volume and oriented towards the needs of our customers,” explains Bertram Staudenmaier.