Danfoss plans to relocate production and strengthen existing sales organisation in Finland , Danfoss

Release Date: 2010-03-17

Danfoss District Energy plans to relocate production of Heat Exchangers and Substations from its factory in Leppävirta, Finland. The planned activities would affect about 124 employees; management has informed the employees and the employee representatives. As a result of this plan, it is expected that manufacturing would be relocated to sites in Slovenia and Poland over the course of the coming year. At the same time the existing sales organisation in Finland would be strengthened

Over the last few years the financial pressures on the Danfoss Group has increased. This has lead to a number of cost reduction activities, to improve the financial performance and to reduce debt. The overall market demand has declined and so it was decided to revaluate the global site structure and it has been necessary for the Danfoss Group to reduce both complexity and the number of employees worldwide.

During this period Danfoss District Energy has also experienced declining results and the large station and heat exchanger business was again not profitable in 2009.

“We have initiated cost reducing activities in our factory in Leppävirta over the last years, which has been supported well by the employees. Unfortunately and in spite of these initiatives, it has not been possible to turn it into an overall profitable business in 2009. It is necessary to evaluate all possibilities to further improve the long-term profitability for Danfoss Heat Exchangers and Substations,” says Anton Koller, Vice President, Danfoss District Energy.

Therefore Danfoss District Energy plans to move production of Heat Exchangers from Finland to its existing production site in Slovenia. According to current plans production of Large Substations are planned to be moved to its plant in Poland. These transfers would both reduce the complexity of the business structure and would make it possible to realise substantial cost synergies by utilizing existing production sites.

The production in Leppävirta is part of the Danfoss District Energy business unit which employs around 1,900 people worldwide. OY Danfoss Ab in Leppävirta has initiated the co-operation proceedings with the employee representatives.

“We will start to negotiate about the plans with the employee representatives as soon as possible and do our best to help our employees in this difficult situation,” says Tero Kosunen, General Manager, Danfoss LPM Finland.

The contemplated plans would not affect domestic sales. Finland is one of the most important markets for District Energy and Danfoss will therefore strengthen its sales organisation and improve competiveness in Finland.

Type:	NORMAL
Company:	Danfoss
Country:	Denmark