Due to softening demand from its traditional western European customers – principally in Germany, Italy and France – Austrian machinery manufacturer Engel (Schwertberg; www.engelglobal.com) is predicting lower sales for its largest operating unit, Engel Austria, in fiscal 2006 (31 March). To save costs, the company plans to eliminate 80 jobs, including 70 in administrative functions at its Schwertberg headquarters and another 10 each at Dietach and St. Valentin. The works council hopes to prevent at least 20 of the planned job losses.

Sales of Engel Austria in the first half of the fiscal year, at EUR 219.5m, were down only slightly against the previous year, and full-year turnover is also expected to be only slightly lower, while market shares remain “stable.” The crux seems to be that this income was generated mainly by contracts signed early in the fiscal year.

The Austrian company took in a “record” number of orders at K 2004, its managing board chairman, Georg Tinschert, said at a press conference during the recent Fakuma trade fair. In the meantime, however, he said order intake from other western European countries, including the UK and Scandinavia, have “fallen off sharply,” and this gap cannot be closed by orders from new EU countries such as Poland, Hungary or the Czech Republic. Asia has been showing weakness, too. US orders are picking up, albeit, from a low level.

Engel is now focusing its attention on central and eastern Europe. Plans are to provide more technical services and set up training centres and show rooms in the region. The Czech headquarters in Prague, with 33 employees, is moving to new premises at the end of this year, new offices in Warsaw are planned for the Polish company with 19 employees, and expansion is also foreseen in Hungary. Moscow-based Russian marketing partner Radun is slated to get additional regional marketing and service facilities.

In North America, Engel´s modest growth is attributed to the group´s multi-component “New Technology” and “Automatisation” segments. At first glance, figures for the machinery manufacturer´s US subsidiary, Engel Machinery Inc (York, Pennsylvania; www.engelmachinery.com), do not look all that encouraging. Sales in the first half of fiscal 2006 were EUR 57m, about half the previous year´s total of EUR 119m. However, in view of the overall state of the North American market, the company sees this as positive. A new technolgy centre, including bench-scale facilities for customer tests, is being set up at York.