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250 Grundfos production staff face redundancy
APRIL 2003 ISSN 1359-6128 www.worldpumps.com
NEWS
INDUSTRIAS EG ACQUIRES NORTHSTAR’S PUMP INTERESTS Northstar Aerospace Inc (formerly Derlan Industries Ltd) has sold its pump interests to its joint venture partner Industrias EG SA. The Mexican group now owns 100% of the common stock of Monterrey-based Corporacion EG and therefore has full ownership of the subsidiary companies Ruhrpumpen GmbH and Ruhrpumpen Inc. Along with manufacturing facilities in Witten, Germany; Tulsa, Oklahoma, USA; and Monterrey, Mexico, Corporacion EG has sales offices in Germany, China, Singapore, the UK and France and throughout North and South America. Corporacion EG’s chief financial officer Jose Elizondo told Pump Industry Analyst that their commitment to the pump industry and to their customers, employees and facilities remained strong and unwavering. Elizondo said that the pump operations were profitable in 2002 and that he was very positive about the future, reporting a strong backlog for 2003. Following this acquisition Industrias EG will
capitalize the company and, together with the sale of non-core assets, the total debt of the company will be cut by 40%, significantly reducing third party interest expenses. Ruhrpumpen Inc is currently in final negotiations to complete the sale of the building and property of its Tulsa, Oklahoma facility to a real estate developer. One of the conditions of the sale is that Ruhrpumpen will lease back the 140 000 sq ft currently being utilized. This sale should be completed by the end of September 2003 and finalizes a major objective initiated at the time the Tulsa operation was purchased from Flowserve.
COMMENT After months of negotiations, Corporacion EG and Ruhrpumpen can now concentrate solely on developing the pump business, moving forward with a fresh focus and a strong order book. ■
250 GRUNDFOS PRODUCTION STAFF FACE REDUNDANCY Grundfos A/S, the pump group’s Danish production company, is to cut its production workforce by 250. Economic uncertainty and the war in Iraq have led to reduced order intake. Over the past few weeks stocks have been increasing and staff have been asked to phase out outstanding accumulated flexible working hours. “We hope this is a temporary falling-off, and we hope to be able to offer the staff in question work again later on. However, whether this will be possible depends completely on the general development and order intake,” said Grundfos A/S managing director Lars Aagaard. The reduced order intake is particularly acute in the Danish factory, partly due to reduced sales in the countries close to the Iraqi war zone, such as Saudi Arabia, Dubai, Turkey and Greece, but also because of a down-turn in the important US market. Things are going better for Grundfos in other parts of the world Grundfos factories in South East Asia, for example, report no shortage of orders. Grundfos Group management say they hope for and expect improvements once the situation in Iraq is clarified. They expect the Grundfos
Group as a whole to achieve its general goals for 2003. Group turnover growth of 5% has been budgeted for 2003, while the company is aiming for a 20% increase in profit before tax. Grundfos considers the growth in profit a prerequisite of the group’s continued ability to selffinance its investment plans for product development and aggressive marketing. Grundfos has budgeted to spend DKr950 million on investments in 2003. Projects include a number of new product launches in 2003, the expansion of existing factories in Hungary and China and the establishment of a production site in Russia. Despite the continued uncertainty in the global economy, and the generally difficult conditions in most of Grundfos’s markets, 2002 was a fairly good year for the group. Grundfos management considered the 5% growth in 2002 turnover from DKr10 214 million to DKr10 703 million as “satisfactory”. 40% of the group’s total growth in 2002 turnover was generated in Eastern European and Far Eastern markets. This compensated partly for the lower growth levels in Grundfos’s larger markets like Germany, Japan and the USA. 2002 profit before tax of DKr726 million was a 17% increase on 2001. Grundfos Group is targetting a turnover of 2 million by 2007.
CONTENTS NEWS 1,13,16 MARKET PROSPECTS 2–4 COMPANY PROFILE 5–6 COMPANY WATCH 7–9 PEOPLE 10 IN BRIEF 10,11 ORDERS 11 CALENDAR 12 DIVIDENDS 12 NPD 12 E-BUSINESS 13 MARKET REPORT 14 DIARY 15 STOCK WATCH 15 ISSN 1359-6128/03 © 2003 Elsevier Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.
NEWS
INDUSTRIAS EG ACQUIRES NORTHSTAR’S PUMP INTERESTS Northstar Aerospace Inc (formerly Derlan Industries Ltd) has sold its pump interests to its joint venture partner Industrias EG SA. The Mexican group now owns 100% of the common stock of Monterrey-based Corporacion EG and therefore has full ownership of the subsidiary companies Ruhrpumpen GmbH and Ruhrpumpen Inc. Along with manufacturing facilities in Witten, Germany; Tulsa, Oklahoma, USA; and Monterrey, Mexico, Corporacion EG has sales offices in Germany, China, Singapore, the UK and France and throughout North and South America. Corporacion EG’s chief financial officer Jose Elizondo told Pump Industry Analyst that their commitment to the pump industry and to their customers, employees and facilities remained strong and unwavering. Elizondo said that the pump operations were profitable in 2002 and that he was very positive about the future, reporting a strong backlog for 2003. Following this acquisition Industrias EG will
capitalize the company and, together with the sale of non-core assets, the total debt of the company will be cut by 40%, significantly reducing third party interest expenses. Ruhrpumpen Inc is currently in final negotiations to complete the sale of the building and property of its Tulsa, Oklahoma facility to a real estate developer. One of the conditions of the sale is that Ruhrpumpen will lease back the 140 000 sq ft currently being utilized. This sale should be completed by the end of September 2003 and finalizes a major objective initiated at the time the Tulsa operation was purchased from Flowserve.
COMMENT After months of negotiations, Corporacion EG and Ruhrpumpen can now concentrate solely on developing the pump business, moving forward with a fresh focus and a strong order book. ■
250 GRUNDFOS PRODUCTION STAFF FACE REDUNDANCY Grundfos A/S, the pump group’s Danish production company, is to cut its production workforce by 250. Economic uncertainty and the war in Iraq have led to reduced order intake. Over the past few weeks stocks have been increasing and staff have been asked to phase out outstanding accumulated flexible working hours. “We hope this is a temporary falling-off, and we hope to be able to offer the staff in question work again later on. However, whether this will be possible depends completely on the general development and order intake,” said Grundfos A/S managing director Lars Aagaard. The reduced order intake is particularly acute in the Danish factory, partly due to reduced sales in the countries close to the Iraqi war zone, such as Saudi Arabia, Dubai, Turkey and Greece, but also because of a down-turn in the important US market. Things are going better for Grundfos in other parts of the world Grundfos factories in South East Asia, for example, report no shortage of orders. Grundfos Group management say they hope for and expect improvements once the situation in Iraq is clarified. They expect the Grundfos
Group as a whole to achieve its general goals for 2003. Group turnover growth of 5% has been budgeted for 2003, while the company is aiming for a 20% increase in profit before tax. Grundfos considers the growth in profit a prerequisite of the group’s continued ability to selffinance its investment plans for product development and aggressive marketing. Grundfos has budgeted to spend DKr950 million on investments in 2003. Projects include a number of new product launches in 2003, the expansion of existing factories in Hungary and China and the establishment of a production site in Russia. Despite the continued uncertainty in the global economy, and the generally difficult conditions in most of Grundfos’s markets, 2002 was a fairly good year for the group. Grundfos management considered the 5% growth in 2002 turnover from DKr10 214 million to DKr10 703 million as “satisfactory”. 40% of the group’s total growth in 2002 turnover was generated in Eastern European and Far Eastern markets. This compensated partly for the lower growth levels in Grundfos’s larger markets like Germany, Japan and the USA. 2002 profit before tax of DKr726 million was a 17% increase on 2001. Grundfos Group is targetting a turnover of 2 million by 2007.
CONTENTS NEWS 1,13,16 MARKET PROSPECTS 2–4 COMPANY PROFILE 5–6 COMPANY WATCH 7–9 PEOPLE 10 IN BRIEF 10,11 ORDERS 11 CALENDAR 12 DIVIDENDS 12 NPD 12 E-BUSINESS 13 MARKET REPORT 14 DIARY 15 STOCK WATCH 15 ISSN 1359-6128/03 © 2003 Elsevier Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.