Kautex: Global uncertainty hurting machinery sales

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Photo by Kautex

Kautex Maschinenbau GmbH said global economic threats ranging from Germany's diesel crisis and Brexit to U.S. trade policy and declining car production in China are causing sales to slump.

In a Jan. 3 news release, the blow molding machinery maker said it is starting to suffer from a downturn in the global economy and will have to cut jobs at its headquarters in Bonn, Germany.

"This adjustment is expected in the near future," Kautex CEO Olaf Weiland said in a statement.

Around 550 employees currently work at the Bonn facility, according to a report from German newspaper General-Anzeiger. Weiland told the newspaper that machine sales are expected to fall 20-25 percent this year, with annual sales for 2019 projected to slip to 120 million euros ($136.5 million).

Kautex exports more than 90 percent of its machines, the company said, which are used to produce parts for several end markets, including automotive and packaging.

"Some of our customers in the automotive segment now have surplus capacity," Andreas Lichtenauer, managing partner at Kautex, said in a statement. "Some machines are not in production."

For the automotive industry, Kautex machines are used to produce fuel tanks and 3D blow molded tubes. The company has also increased its development of composite-reinforced pressure vessels, though sales from the additional energy storage systems have not compensated for the decline in incoming orders, the company said.

In addition to job cuts, the company's sales organization will also be realigned to accommodate "current economic changes as well as changing customer and market requirements," according to the news release. This includes a stronger focus on Kautex's automotive and packaging divisions.

Kautex said it is also planning to further the development of recycled materials used in packaging.

"We regard the promotion of plastics recycling and working with our partners to optimize material cycles as an important responsibility for our company," Lichtenauer said.

Plastech Beteiligungs GmbH, an industrial holding company in Vienna, is the majority owner of Kautex. In January 2018, the firm bought a 79.4 percent share in Kautex previously held by Berlin investment company Capiton AG.

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