Componenta Corporation and Michel Van de Wiele NV, the owner of Ferromatrix NV, have agreed to combine and concentrate their production of large furan cast components into one foundry in Kortrijk, Belgium subject to all customary approvals. Ferromatrix NV is a highly automated furan foundry with the focus on large cast components and belongs to Van de Wiele Group, a world wide leader in carpet and textile machines. By doing so, the parties will create one efficient unit for production and sales of large furan components operating at high capacity utilization rate.
Componenta and Ferromatrix NV will establish a 50/50 joint venture company, which will from 1 January 2016 onwards, specialize in sales of large furan cast components. In a second phase, subject to certain conditions, Componenta has a possibility to become a minority shareholder of Ferromatrix with 40% shareholding and in connection with this transaction, the joint venture sales company’s shareholding will change so that Componenta will own 60% of it and Van de Wiele 40%. The second phase is planned to be carried out in 2017.
Componenta’s wide customer service network will be responsible for the sales of large furan cast components and customer cooperation. Ferromatrix will also direct its third party sales through the joint venture sales company. Ferromatrix will be solely responsible for the production of combined large furan cast components.
The production cooperation with Ferromatrix is related to Componenta’s measures to improve the capacity utilization rates of the production lines and to concentrate the production operations into larger units. As a consequence, the furan foundry line in Heerlen, the Netherlands will be closed down by the end of 2015. Componenta will continue producing hand moulded furan castings at the Suomivalimo foundry in Iisalmi, Finland, serving the Nordic customers.
As part of Componenta’s efficiency improvement program the greensand line of Weert foundry is planned to be transferred to Heerlen during second half of 2016. In the future the Heerlen foundry will operate two greensand lines. As a consequence of planned transfer Weert foundry will be closed down by the end of 2016 and all Componenta’s operations in the Netherlands will be consolidated in the Heerlen unit.
These measures will have an impact on personnel of Componenta’s Dutch operations which means a gradual reduction of approximately 140 employees by the end of October 2016. Currently Componenta employs approximately 435 employees in the Netherlands excluding leased personnel.
The cost savings and other benefits based on these announced measures are estimated to be approximately EUR 6 million annually and be gradually achieved by the year 2017. One-time costs are estimated to be EUR 9 million and write-downs in the balance sheet EUR 3 million during 2015 - 2016.
Closing down the Heerlen furan line and starting the cooperation with Ferromatrix are expected to bring positive effects already in 2016. Changes to be made are part of Componenta’s efficiency improvement program and strategic measures to improve production efficiency, profitability and competitiveness. The cost synergies created by the measures together with our engineering expertise and diverse production capabilities will strengthen Componenta’s position as a significant global provider of high quality cast components and casting solutions.
Helsinki, 14 July 2015
COMPONENTA CORPORATION
Heikki Lehtonen
President and CEO
For further information, please contact:
Componenta Corporation
Heikki Lehtonen
President and CEO
tel. +358 10 403 2200
Mika Hassinen
CFO
tel. +358 10 403 2723
Componenta is a metal sector company with international operations and production plants located in Finland, Turkey, the Netherlands and Sweden. The net sales of Componenta were EUR 495 million in 2014 and its share is listed on Nasdaq Helsinki. The Group employs approx. 4,250 people. Componenta specializes in supplying cast and machined components and total solutions made of them to its global customers, who are manufacturers of vehicles, machines and equipment.