Texunion Exits Print Converting Business
August 2, 2000
Pfaffstatt, France - Texunion, a major print converter in the world market with headquarters in Mulhouse, France, will permanently shut down its printing and production facilities in Pfaffstatt ( Alsace). Texunion is owned by the French DMC Group, Dollfuss, Mieg & Cie.
DMC intends to continue Texunion just as a trading company and will have to print elsewhere, but the trade has doubts as to its success, informed sources said. ''Too much damage was done and still will be done when trying to close out Texunion's huge inventories. In the past, management was told to fill production with orders regardless of whether or not it had sales against actual orders. This badly affected regular sales for Texunion and its competitors,'' a source explained.
Market observers were not surprised by the announcement of the closing. Ever since DMC was founded in 1964, the company has continuously reduced its work force from what were originally 1,000 people. In the '90s Texunion generated sales of well over $100 million at its peak.
However, it was not only cheap, imported prints from Pakistan, China and Korea and fast changing fashion that was responsible for the closing of Texunion. Two years ago management of DMC decided to shift production of expensive apparel fabrics to their daughter company KBC at Loerrach, Germany and to continue in Mulhouse, France only the production of home furnishing fabrics. This was supposed to cut down costs but the result was the opposite.
DMC figures went deep in the red. For the last years of the 220 million-DM loss at DMC, about 50 million-DM originated from Texunion.
While the French banks kept protecting Europe's largest textile group, they themselves sold off their German daughter company KBC to Claas E. Daun, the German main shareholder of the KAP textile group, Daun forced Hans Unterseh former managing director of KBC out of retirement. In a short time, Unterseh turned the new KBC back into a well running plant dedicated to apparel fabrics.
DMC now wants to focus on leisure and sports wear apparel.
''It was a mistake of the French management to give up the apparel production and to rely on home furnishings only,'' said Daun. The production was too big to only carry one part.''
About 260 employees in the Pfaffstatt operation near the Mulhouse plant will lose their jobs, DMC officials confirmed. The closure and layoff of people may take well until the end of 2000, a company source confirmed. However, DMC officials said they were having no problems with the unions. During the last few months the unions did agree to three day per week shifts without compensation. DMC proposed to pay workers back in full for the period of existing contracts but the workers do not have to show up for work. Only 50 of the actual 311 employees will continue a certain time to develop social plans, sell the machines and the 24 hectares of real estate in Pfaffstatt.
DMC intends to continue Texunion just as a trading company and will have to print elsewhere, but the trade has doubts as to its success, informed sources said. ''Too much damage was done and still will be done when trying to close out Texunion's huge inventories. In the past, management was told to fill production with orders regardless of whether or not it had sales against actual orders. This badly affected regular sales for Texunion and its competitors,'' a source explained.
Market observers were not surprised by the announcement of the closing. Ever since DMC was founded in 1964, the company has continuously reduced its work force from what were originally 1,000 people. In the '90s Texunion generated sales of well over $100 million at its peak.
However, it was not only cheap, imported prints from Pakistan, China and Korea and fast changing fashion that was responsible for the closing of Texunion. Two years ago management of DMC decided to shift production of expensive apparel fabrics to their daughter company KBC at Loerrach, Germany and to continue in Mulhouse, France only the production of home furnishing fabrics. This was supposed to cut down costs but the result was the opposite.
DMC figures went deep in the red. For the last years of the 220 million-DM loss at DMC, about 50 million-DM originated from Texunion.
While the French banks kept protecting Europe's largest textile group, they themselves sold off their German daughter company KBC to Claas E. Daun, the German main shareholder of the KAP textile group, Daun forced Hans Unterseh former managing director of KBC out of retirement. In a short time, Unterseh turned the new KBC back into a well running plant dedicated to apparel fabrics.
DMC now wants to focus on leisure and sports wear apparel.
''It was a mistake of the French management to give up the apparel production and to rely on home furnishings only,'' said Daun. The production was too big to only carry one part.''
About 260 employees in the Pfaffstatt operation near the Mulhouse plant will lose their jobs, DMC officials confirmed. The closure and layoff of people may take well until the end of 2000, a company source confirmed. However, DMC officials said they were having no problems with the unions. During the last few months the unions did agree to three day per week shifts without compensation. DMC proposed to pay workers back in full for the period of existing contracts but the workers do not have to show up for work. Only 50 of the actual 311 employees will continue a certain time to develop social plans, sell the machines and the 24 hectares of real estate in Pfaffstatt.
