The FAMUR Group, in the face of the growing crisis caused by the economic slowdown in the mining industry and the overlapping COVID-19 pandemic, decided to adjust its production structures to the changing market needs.
As a result of the analysis of the production area of belt conveyors as well as queues and routes in the context of the current market situation and the deepening economic slump, the management of FAMUR decided to transfer the production of these product groups from the production plant in Piotrków Trybunalski to the plants in Nowy Sacz and Katowice, respectively.
The above will allow the negative effects of the reduction of orders as a result of the global crisis caused by the COVID-19 pandemic to be limited, as a result of which contractors both at home and abroad suspend investments in mining machinery and equipment. This has particularly affected the product group of belt conveyors, as well as queues and routes. In view of the difficult situation of the domestic mining industry, for which the restructuring programme has not yet been published, the group does not see any prospects for the recovery of market demand for this product category at an earlier level.
In view of this situation, a difficult decision was made to proceed with the liquidation of the branch in Piotrków Trybunalski and the implementation of collective redundancies. The main activity of the branch in Piotrków is the production of belt conveyors, generating approximately 85% of revenues as well as railways and routes, accounting for approximately 15% of the branch's revenues. As a result of the progressing from May 2020, a drop in market demand for belt conveyors and the expected further avalanche collapse from October, in the current situation it was possible to obtain orders covering only about 20% of the production capacity of the branch for the following months and it is not likely to obtain more of them. It is directly related to the market saturation with this product group, which at the same time is easy to relocate in the event of the need to transfer the equipment to another mine from possibly liquidated movements, which in consequence results, among other things, in a drastic limitation or even in the absence of new tender procedures. At the same time, the uncomplicated design of these devices allows customers to service them on their own or with the help of associated repair companies, thus limiting the area of possible aftermarket services.
The production of belt conveyors will be continued at the branch in Nowy Sacz, and railways and routes in Katowice, allowing for the maintenance of production, technical and technological competences as well as product know-how in the FAMUR Group. The branch in Piotrków Trybunalski will be put into liquidation. Some employees will be able to move to other branches - 27 people to the plant in Katowice, and 10 to Nowy Sacz. The remaining employees - 198 people - will be covered by the collective redundancy procedure.
Read the article online at: https://www.globalminingreview.com/mining/08092020/famur-groups-response-to-covid-19/