The SMS group has noticed a reluctance among its customers to place orders. It is estimated that order intake in 2012 will total €3.2bn putting it below 2011’s €3.42bn. Sales in 2012 are anticipated to reach just above €3bn (2011: €3.07bn).
Dr Heinrich Weiss, Chairman and CEO of the SMS group, stated: “Right now our customers are very reluctant to place orders, not only because of the weak steel market, but also due to the expected effects on the global financial system of Europe’s national debt and euro crisis. Originally, we planned an order intake of more than €3.5bn in 2012.“ That means capacity utilization in the SMS group next year is set to settle at the lower end of the limit. Currently, the average employment level is secure through to early in the new year.
The recent acquisition of the majority share in Luxembourg company Paul Wurth, a market major in the construction of blast furnaces, coking plants, and sintering plants, gave SMS an extra order volume of some €500M.
The number of employees this year has increased to 11500 (2011 10600) – due to the takeover of several smaller companies and a staff recruitment drive in China and India.
Global networked manufacturing
To ensure high quality, SMS remains committed to producing the most complex components of its machinery and plants in Germany. This is why the company invested heavily over recent years in expanding and upgrading its facilities in Hilchenbach and Mönchengladbach. Parallel to these measures, SMS expanded its production capacity in China. Here activities are mainly concerned with improving customer service and manufacture of special products designed for the Chinese market. These can be produced at a lower price locally.
Overall, the aim is to further cut manufacturing costs by focusing on production-optimized design, greater efficiency in logistics, plus increased productivity in both engineering and production. Using the same strategy as that pursued after the first financial crisis of 2008, the company will make the most of the weaker order intake to drive technological development. Equally important is intensifying on-the-job training and qualification of their experienced core personnel as well as training new staff.