Following the changed market conditions for wind tower internals during 2019, Alimak Group today announces the decision to close down Avanti's assembly plant in Tianjin, China.
During 2019, Alimak Group's tower internals business under the Avanti brand has faced aggressive price competition, primarily in China. This has had a negative impact on the Group's business unit Wind, part of the Industrial Equipment business area though the service lift and ladder parts of the Wind business has continued to perform well.
As communicated in Alimak Group's Q3 report, published on October 23, 2019, the Group has been evaluating further measures to mitigate these changed market conditions.
As an adaption of the cost base given the lower volumes, the Group today announces the plan to close Avanti's plant in Tianjin, China, which primarily has assembled tower internals for the Wind sector. The decision will affect 48 employees in Tianjin. Avanti's Shanghai plant is not affected by the decision.
The last day of operation will be at the end of December 2019. After the closing, Alimak Group will have eleven production and assembly facilities in eight countries around the world, of which five are related to the Wind business unit.
The decision will imply restructuring costs of around MSEK 17 which will be taken in Q4 2019 as a non-recurring item.
"Following the changed market conditions, combined with our decision to not participate in price competition on more commoditised, low margin products, we have decided to close our assembly location in Tianjin. Having only one production site for Wind in China will provide increased cost optimisation and competitiveness for Avanti China to continue delivering safe, high-quality vertical access solutions to the wind market. We constantly review our footprint and efficiency of production to optimise the Group's operations to fit market conditions. However, closing a plant is an extraordinary decision, and we regret the impact this will have for the affected employees and their families", says Tormod Gunleiksrud, CEO Alimak Group.
For further information, please contact:
Mathilda Eriksson, Investor Relations and Group Communications Manager, +46 8 402 14 41
About Alimak Group
Alimak Group is a world-leading provider of vertical access solutions for professional use. With presence in more than 100 countries, the Group develops, manufactures, sells and services vertical access solutions with focus on adding customer value through greater safety, higher productivity and improved cost efficiency. Alimak Group's products and solutions are sold under the brands Alimak, CoxGomyl, Manntech, Avanti and Alimak Service. The Group has an installed base of around 70,000 elevators, hoists, platforms, service lifts and building maintenance units around the world. Founded in Sweden 1948, the Group has its headquarters in Stockholm, 12 production and assembly facilities in 8 countries and 2,400 employees around the world. www.alimakgroup.com