Press release
Essen, 28 June 2006 – The Elster Group, one of the world’s leading manufacturers and suppliers of high quality metering solutions to the gas, electricity and water industries, has today announced plans to improve its European business operations. These plans aim to ensure that the whole company has a long-term future and that its competitive edge is strengthened. This will primarily be achieved through operational integration, moulding individual units and the fragmented structure into a single company with a shared culture. Parallel to this, and over the next 24 months, Elster will enhance business processes across Production, Design & Development, Raw Material Purchasing, Human Resources and Information Technology.
Elster, which operated as Ruhrgas Industries until 2005, now faces an increasingly competitive market place combined with rising costs. A thorough analysis of 56 Elster sites located in 30 countries on five continents showed that only by improving the production network and numerous process enhancements could the company achieve its goal of being market leader in the measurement sector.
Global market conditions have forced the pace of consolidation of the company. The market for measuring devices is increasingly under pressure to reduce costs, not least because many manufacturers have relocated production to Asia. This has been combined with an explosion in raw material costs, downward pressure on end product prices from customers and changes in EU legislation that have removed barriers to market entry.
“In the long term, we want the Elster Group to be the global market leader in both the manufacture and the supply of high quality meters for gas, water and electricity in an immensely competitive market,” said Siegfried Putzer, Managing Director and Group Vice President of Human Resources. “It is crucial for our survival that we integrate the 56 manufacturing sites, 32 of which are located in Western Europe. Alongside investments in improving our workflow and the integration of core competences at selected sites, we will grow our position in the markets we serve by delivering world-class products and superior customer service.”
As part of the planned integration measures in Europe about 300 jobs will be lost, representing 3 percent of the Group’s worldwide workforce of 9,000. In Germany, about 50 full-time jobs will be lost. In the UK Elster will close its plant located at Tipton in the West Midlands and cut back operations at its plant in Silvolde in the Netherlands.
Putzer continued: "We are very reluctant to shed jobs and have thought every detail through very carefully. However, we believe that these measures are necessary in order to ensure the long-term success of the Elster Group. We will implement them in a way that puts the welfare of our staff who have lost their jobs first. Among other things we intend to transfer some of the jobs and staff to external service providers."
ENDS