Krones said today that it will scrap packaging and palletising operations at its subsidiary Kosme, which specializes in smaller-sized filling and labelling machines for small bottlers and SMEs.
The German firm plans to slash jobs at Kosme’s Italian head office in Roverbella by an undisclosed amount, and said it has been in negotiations with local trade unions over the cuts since July 7.
The news falls as Krones reported revenues for the first half of 2014 up 4.2% to €1.435bn ($1.93bn), with the company’s order book bolstered by a 5.7% lift year-on-year and an improving EBT margin of 6.2%.
“Overall, based on the development of markets relevant to Krones and the continuing uncertain economic outlook, the company expects revenue to grow by 4% in 2014. Krones does not expect any support from price levels,” the company said.
Second Kosme site in Austria unaffected
Kosme has another production facility in Sollenau, Austria, but this in unaffected by the changes, which Krones says are focused on the long-term survival of the Roverbella site.
“In order to achieve this, Kosme’s product portfolio has to be optimised, and the capacities right-sized so as to ensure that Kosme can operate with sustained profitability,” Krones said today.
To achieve this goal the company plans to focus on its core competencies in filling and labelling technology and discontinue operations in packing and palletising.
“Krones will be making every effort to ensure that this painful but unavoidable action is handled with the minimum social impact on those involved,” the company said.
“Nothing will change in terms of Krones’ strategic focus, in which Kosme and the plant in Italy play an important role. Kosme will continue to offer on all markets its core products of fillers and labellers, plus complete lines supplemented with OEM products,” it added.
Krones acquired full control of Kosme back in April 2009 to target independent private bottlers and SMEs, while the wider group focused on global brewers, soft drinks and distilling groups and large food manufacturers.