With the majority of the 2008 business year behind us, as is the case with many of our fellow companies and customers in the sector, the
Koehler Group has to acknowledge that our business development expectations have failed to be met to their full extent.
Our plan for 2008 foresaw moderate, almost organic growth in almost all segments, largely reflecting the opinions of many economic experts. This plan has been dealt a painful blow in the last few weeks in particular. The speed with which the US banking crisis became a global
financial crisis – bringing with it the threat of a worldwide recession – was both unforeseen and unprecedented in this magnitude.
As with almost all sectors, the paper industry and the Koehler Group have been affected by these events.
Our expectations for the year 2009 have consequently been adjusted, and we now anticipate that we will be treading water as far as sales,
turnover and results are concerned, although we are also hopeful that the strengthening US dollar and the easing of pressure on raw material and energy costs will bring us some slight relief in 2009. We subsequently anticipate reduced capacity utilisation and containment action in the first half of 2009.
With regard to 2008, we note that although we have failed to achieve the sales volumes and turnover of the previous year, or as planned, the
results are almost according to plan. We can also observe that many of the steps initiated to achieve a sustainable improvement in results have
been effective.
The Ettlingen mill with its centuries-old tradition of paper making was closed at the end of September. A redundancy plan for the approximately 80 employees – largely centred on accommodating
these staff in a transitional company – is easing the key fears for the future and aims to utilise appropriate qualification measures to enable future employment beyond the Koehler Group.
Our “Chancen PuR” cost reduction programme has been showing promising initial results since the middle of the year. In contrast to earlier programmes, “Chancen PuR” is a continuous programme for the recognition of savings potential throughout the entire value-added
chain of our products. Although the teams are sector specific, they are interdisciplinary in their composition, with extensive powers of decision
and implementation. At the management meeting of 7 November the team leaders of the individual “Chancen PuR” teams had the
opportunity to present their teams and their successes, as well as to exchange experiences. The expansion of our activities in the thermal
papers segment is advancing at a fast pace. However, the events in the global financial markets are also resulting in the need for adjustment
here. For example, the plans for the establishment of a new thermal paper production facility in the south-eastern United States have been put on hold, as the borrowed capital necessary to cover the cost of this investment appears neither conceivable nor strategically justifiable at this time. Instead, it has been agreed with the project partners that we shall maintain an increased focus on the acquisition of a papermill that can be converted for the production of thermal paper at reasonable and justifiable expense. In this case it is vital that the project goals with regard to production capacity and economy – cost leadership – are met. In actual fact, our project group has already identified a suitable factory. Koehler experts and external consultants are currently examining the viability of this site.
Unfortunately, the confidentiality agreement with the potential vendor means that we are currently unable to give a more detailed description.
We plan to conclude the acquisition in the 1st quarter of 2009, thus enabling an anticipated start of production in the 1st quarter of 2010.
This change of direction was resoundingly approved by the advisory board at an extraordinary meeting held on 9 October and the Executive Board has been authorised to pursue contractual negotiations to the point of submission of a binding offer.
We continue to face the tasks and challenges with great optimism and the Executive Board is aware
that it must ask a good deal of the employees at the Koehler Group. We do this in the certainty that all employees stand together and that each
and every one shall contribute to the further success of the Koehler Group. The Executive Board would like to warmly thank our employees
for this commitment, which they demonstrate on a daily basis.
At this point we would like to thank our business partners for their trust, upon which we shall continue to build.
We wish you all a pleasant festive period and a good start to the new year.
Werner Ruckenbrod
Managing Director
