Balta Carpets has confirmed that it intends to move most of its broadloom carpet production to the plants of sister companies in the UK, saying ‘profitable production in Belgium [is] impossible’.
The multi-million pound investment plan for the Balta Rugs division is unaffected.
In what it said was a current statement of intent, it says it will ‘right size its broadloom production in Sint-Baafs-Vijve. The difficult economic environment with exponentially rising labour costs, an unstable energy policy and the falling demand for broadloom carpet on the Continent, makes competitive and profitable production in Belgium impossible.
‘Most of the broadloom activities would be transferred to different plants of Victoria in the UK, optimising the available machine capacities.
‘The investment plans of €14m in the Sint-Baafs-Vijve site for the Balta Rugs division remain unchanged.
‘Balta Carpets will continue to focus on the sales and distribution in the UK and ROI of quality carpets that represent excellent value. Thanks to further investments in strongly increased local stocks supported with reliable distribution through the Alliance network, Balta’s customers will benefit from a stronger product offer and a better service than ever.’
In November Geoff Wilding, Victoria executive chairman told shareholders: ‘Integration of Balta is proceeding apace in order to realise the full benefit this scale advantage offers. As expected, there will be some exceptional costs associated with the reorganisation (largely redundancy and factory closure costs) but the cash impact is expected to be zero due to the disposal of assets that will become surplus (primarily real estate) once the integration is completed.’
The Belgian manufacturing sector has been hit hard by dramatically higher energy costs, with high energy users such as steel and flooring producers halting production or moving it to countries where increases have been lower. Beaulieu International Group, for example, moved some yarn production from Belgium to a nearby factory in France as energy rates were lower there and announced the end of tufted carpet production.
