Swedish brand Nobia has revealed it is to close its Dewsbury and Grays production sites after the group's profits were impacted by a 'weaker performance in the UK', that it says has forced it to reassess its presence in the market. Higher supply chain costs in the Nordics were also to blame, Nobia said. Its proposed cost reduction programme, with which it hopes to make annual savings in excess of SEK 300m, will mean potential job losses for 500 employees. It currently has five production sites in the UK, and employs 2,600 people.
In a statement, the company said: 'In the UK we will reposition and exit unprofitable projects business to drive necessary profitability improvement and increase competitiveness. The proposed changes, subject to customary union negotiations, include consolidation of the manufacturing footprint and flattening of the UK central organisation. It is proposed that the production sites in Dewsbury and Grays in the UK be closed.'
Jon Sintorn, president and CEO of Nobia, said: “We are addressing several areas in order to achieve significant and sustainable margin improvement. Regrettably, some of the necessary actions we are taking will result in redundancies. In the UK, the proposed changes will make us a better business partner for our customers and cater for an improved profitability level. In parallel, we are continuing to focus on completing the construction of our new Nordic factory in Jönköping, which will be the most modern and efficient in our industry. I expect the measures that we are now implementing will deliver annual cost savings in excess of SEK 300m, as well as further margin improvement from strong pricing discipline and operational efficiencies in our supply chain.”
Nobia was formed in 1996 with a Nordic core operation comprising doors, windows and kitchens, and a wholesale business for building materials. In 1999 it made the strategic decision to focus only on kitchens and expand outside the Nordic region. In the early 2000s it acquired UK kitchen brand Magnet, German Poggenpohl, among others.