core sector communique

SMS GROUP

SMS group expects higher order intake than last year

After the dramatic downturn in 2009 , order intake by the SMS group recovered well in business year 2010, and in the current year 2011 it is forecast to reach EUR 3.4 billion.

Dr. Heinrich Weiss, Chairman and CEO of the SMS group, Says: ‘’The number of projects ready for contracting remains stable, but due to the serious effects of the national debt crisis in Europe and the risk of it spreading to the global financial system, we have noticed an increasing tendency since the middle of the year to hold orders back.’’ This applies especially to larger projects in the developing countries and emerging economies, but also customers in the established industrialized countries are more cautious about awarding new orders in view of the worsening economic climate.

However, capacities in the SMS group companies are fully booked until well into next year because orders in hand have increased on the previous year.

As a result of the takeover of more than 90 percent of the shares in elexis AG, Wenden, Germany, plus the recruitment of even more employees in China and India, the number of employees in the SMS group has increased to some 10,600 (2010: 9,209 employees),

Enhanced competitiveness

‘’During the recent past,’’ says Heinrich Weiss, ‘’we took the opportunity to further intensify technological development and rationalize our processes. We have already succeeded in reducing overheads. Our focus now is on also cutting manufacturing costs with production-optimized design, greater efficiency in logistics, and improved productivity in engineering and manufacturing. At the same time, our investment programs are going ahead as planned.’’

After the opening of its workshop in Shanghai in October last year, built at a cost of around EUR 20 million, SMS Meer is now investing some EUR 60 million in its Monchengladbach location. This involves replacing 75 percent of all its existing machine tools. Furthermore, the heavy load hall is being expanded by some 4,000 square meters of extra space.

Also ongoing is a 20-million-euro SMS Siemag project for the construction of a workshop near Shanghai, scheduled for completion in early 2012. In Hilchenbach, the original headquarters of the family company founded more than 140 years ago, investments totaling EUR 80 million over several years to create one of Europe’s most modern heavy machinery construction shops will be concluded next year.