BALDA
Further repercussions from the BenQ affair / Three German facilities for sale / Job losses
Two things are currently causing major concern for the management of mobile phone supplier Balda (Bad Oeynhausen / Germany; www.balda.de): the crisis at mobile phone manufacturer BenQ, which is now having stronger repercussions than expected, and the sharp decline in purchases by market leader Nokia, which is greater than predicted for Europe. As a result, the company has announced a pre-tax loss of EUR 47.8m for the third quarter of 2006 (same period last year: +EUR 13.4m) from sales that slumped to EUR 82.5m (EUR 103.1m). For the year as a whole, cautious sales estimates are running at "below EUR 400m", while the forecast for the EBT is minus EUR 45 to 50m – the majority of this being book losses.
The reaction was not long in coming: Balda is to sell its entire remaining automotive division, comprising four companies and 750 employees, is axing 250 jobs at its home location and ending contracts with 450 of the 1,000 temporary workers at its Hungarian facility in Veszprem, which supplies Nokia in Komarom. In total, employee numbers in Germany are being cut from the current 1,600 to around 600. Business is healthy in operational terms, however, Board chairman Joachim Gut stressed during a press conference in Frankfurt / Main. Without the negative influences that have emerged, the company would have ended the year "EUR 10 to 15m in the black". For 2007, he and CFO Volker Brinkmann are expecting sales of EUR 650 to 700m and an EBT of EUR 50 to 55m. Sales will be generated in equal proportions by the core division, Plastics Technology, and the Touch Screen Solutions section.
The companies up for sale are injection moulders Balda Heinze (Herford / Germany; www.balda-heinze.de), with its two electroplating subsidiaries HeRo Galvano Technik (Herford / Germany) and SKM (Oberlungwitz / Germany), and IM film processor Albea Kunststofftechnik (Seelbach / Germany). These companies can no longer fill their capacity with the declining order volume in the infocom sector (mobile phones). Talks on Balda-Heinze have already progressed significantly, explained Joachim Gut, who is expecting a deal to be finalised by the end of the year. He would not disclose the prospective buyer.
In global terms, Taiwanese electrical group, BenQ, accounts for 25% of Balda´s sales. High losses in the mobile phone business have dragged the group way into the red and prompted it to withdraw from its mobile-phone business in Europe and Latin America. Brinkmann expects the production facility in Manaus / Brazil to stop taking products from Germany very soon. And a figure in the "low two-figure million range" has been put on business with BenQ in Asia for 2007.
BenQ Group, which also produces computer components for Dell and Hewlett-Packard as well as digital cameras, screens and laptops, has now cut back its mobile phone production by 60% and slashed expenditure on development and marketing by more than 90%.
In Bad Oeynhausen, Balda is putting great emphasis on the medical technology sector (inhalers, lancet devices for diabetics) for the future. Here, the company is up against competition from manufacturers such as Wilden (Regensburg / Germany; www.wilden.de). Sales are expected to run at EUR 25m in 2007 and rise to between EUR 60m and 70m over the next three to four years.
The reaction was not long in coming: Balda is to sell its entire remaining automotive division, comprising four companies and 750 employees, is axing 250 jobs at its home location and ending contracts with 450 of the 1,000 temporary workers at its Hungarian facility in Veszprem, which supplies Nokia in Komarom. In total, employee numbers in Germany are being cut from the current 1,600 to around 600. Business is healthy in operational terms, however, Board chairman Joachim Gut stressed during a press conference in Frankfurt / Main. Without the negative influences that have emerged, the company would have ended the year "EUR 10 to 15m in the black". For 2007, he and CFO Volker Brinkmann are expecting sales of EUR 650 to 700m and an EBT of EUR 50 to 55m. Sales will be generated in equal proportions by the core division, Plastics Technology, and the Touch Screen Solutions section.
The companies up for sale are injection moulders Balda Heinze (Herford / Germany; www.balda-heinze.de), with its two electroplating subsidiaries HeRo Galvano Technik (Herford / Germany) and SKM (Oberlungwitz / Germany), and IM film processor Albea Kunststofftechnik (Seelbach / Germany). These companies can no longer fill their capacity with the declining order volume in the infocom sector (mobile phones). Talks on Balda-Heinze have already progressed significantly, explained Joachim Gut, who is expecting a deal to be finalised by the end of the year. He would not disclose the prospective buyer.
In global terms, Taiwanese electrical group, BenQ, accounts for 25% of Balda´s sales. High losses in the mobile phone business have dragged the group way into the red and prompted it to withdraw from its mobile-phone business in Europe and Latin America. Brinkmann expects the production facility in Manaus / Brazil to stop taking products from Germany very soon. And a figure in the "low two-figure million range" has been put on business with BenQ in Asia for 2007.
BenQ Group, which also produces computer components for Dell and Hewlett-Packard as well as digital cameras, screens and laptops, has now cut back its mobile phone production by 60% and slashed expenditure on development and marketing by more than 90%.
In Bad Oeynhausen, Balda is putting great emphasis on the medical technology sector (inhalers, lancet devices for diabetics) for the future. Here, the company is up against competition from manufacturers such as Wilden (Regensburg / Germany; www.wilden.de). Sales are expected to run at EUR 25m in 2007 and rise to between EUR 60m and 70m over the next three to four years.
31.10.2006 Plasteurope.com [206658]
Published on 31.10.2006
German version of this article...