Significant decrease in profit expected
As in 2012, the order intake by the SMS group will be below target for 2013. A net result well short of the previous year is anticipated.
Dr. Joachim Schönbeck, spokesman of SMS Holding GmbH, said: “Low utilization of capacities and continuing high raw materials prices are making sales difficult for our customers. That’s why they have been extremely reluctant to invest again this year. Just like last year, order intake has fallen behind our forecasts. So once again, we have to be ready for under-utilization of capacity in some areas in 2014.”
This year, the number of employees including apprentices increased to some 14,000 (2012: 11,822). The reasons are the first consolidation of Paul Wurth as well as takeovers of a few smaller companies, but also new jobs in China and India.
Securing quality – cutting costs
To ensure high quality, SMS remains committed to producing the most complex components of its machinery and plants in Germany. That’s why the company invested heavily over recent years in upgrading its facilities in Hilchenbach and Mönchengladbach. Yet, parallel to these measures, it also expanded its production capacity in China. The focus here is on the provision of better customer services locally and the construction of machines specifically designed for the Chinese market. It is a similar picture on the Indian market, where another workshop is currently under construction and scheduled to start operations in 2014.
Overall, the company is working on cutting manufacturing costs even more with production-optimized design plus greater efficiency in engineering, manufacturing, and logistics.
Opportunities in green technology, service and revamps
The SMS group has identified a surge in demand for green technology solutions, meanwhile also a big issue on the Chinese market. The same goes for small revamps with short return-on-investment periods. According to Schönbeck, “There is a vast potential for future growth here.”
SMS Siemag AG and SMS Meer GmbH are both companies of SMS group which, under the roof of SMS Holding GmbH, consists of a group of companies internationally active in plant construction and mechanical engineering for the steel and nonferrous metals industry.