German cabinet manufacturer Hülsta is to undertake a reorganisation of the company under insolvency protection.
The move, similar to that of Chapter 11 in the US, sees operations continue. The company blamed the development on pandemic lockdowns preventing the completion of an ongoing reorganisation, increased energy and raw material costs and a fall in demand.
‘Especially in these uncertain times, we not only update our range, but also have to work on the structure of the companies in the Hülsta Group. Making the organisation more flexible and lean, efficient alignment are important in order to align companies with the future in these challenging times,’ says Thomas Knecht, Hülsta md.
The insolvency proceedings under self-administration only affect Hülsta and the service company DIHUG which together employ 580 people, and not the rest of the group.
‘In a challenging environment, we are concentrating on aligning the group of companies with the requirements of the market and customers and actively shaping the future of the associated companies. The economic and socio-political framework conditions have changed fundamentally: the government-imposed lockdown measures in the course of the pandemic have slowed us down considerably in our ongoing restructuring process. In addition, there are now, for example, horrendous energy costs for the 100,000sqm production area of the Hülsta works and massive price increases for raw materials and in the supply as well as a general reluctance to buy, which is becoming clear in the overall market.’
Measures introduced since 2019, such as investment in machinery, digitization strategies and a streamlined range will continue. The company had a previous insolvency restructuring on 2008/2009.
‘All of us together – the teams of Hülsta-Werke Hüls and DIHUG – continue the operative business with great commitment, even if the general conditions are currently extremely difficult. At the Autumn trade fair in Stadtlohn, we presented extensive innovations and renewals of Hülsta top sellers. The feedback from our trading partners was very positive. Despite all the tradition, we impressively demonstrated there that we have great power for transformation. We are all now adjusting to the new framework and will emerge stronger from this period,’ says Knecht.
