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Macfarlane group UK Ltd, A & W Fullarton job losses

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Macfarlane group UK Ltd, A & W Fullarton job losses

  1. 1.  Sunday 22 March 2015  Hello Visitor  Sign in | Register | Subscribe Search heraldsc search Macfarlane issues new warning RobertPowell Business Editor RobertPowell Business Editor Friday 6 November 1998 MACFARLANE (Clansman), the Glasgow-based packaging group, announced 200 job losses yesterdayas it issued its second profits warning this year. The shares plunged 19p to 50.5p as City analysts once more downgraded their profit forecasts. Scotland will bear the brunt of the job cuts, which will reduce Macfarlane's 2100 workforce by nearly 10%. The company said full-year profits would fall ''belowdirectors' expectations'' because Russianvodka manufacturers had cancelled big orders for bottle enclosures and the electronics industry in Scotland was ordering less packaging than expected.Macfarlane is making a #500,000provisionfor loss of business with Russia and will take a further charge of #750,000to cover the redundancy costs.Up to 90 jobs will be lost at Daniel Montgomery in Kirkintilloch, which makes sophisticated bottle enclosures for the drinks trade. And 65 will go at A&W Fullarton in Govan, which makes packaging for the electronics industry. South of the Border,Macfarlane
  2. 2. will close its cardboard packaging plant at Stalybridge in Northamptonshire with the loss of 45 jobs. Chairman John Ward, who took over from company founderLord Macfarlane in May, said Daniel Montgomery had been hit by Russia's re-nationalisation of the spirits trade last month. This led to the cancellation of orders from several vodka bottlers in the private sector.A&W Fullarton is suffering from the global downturn in the electronics industry. The Govan factory normally experiences a 35% to 45% surge in demand during the last quarter as computerand mobile phone companies rush to meet Christmas orders. But Ward said the seasonal uplift was only running at half this level. There is however a third and more fundamental reason for the job losses.Ward is determined to move Macfarlane out of commodity manufacturing to concentrate on higher added value products designed in house. ''I would like the whole of the Macfarlane group to focus more on the proprietary and the special,'' he said. Daniel Montgomery will therefore phase out the manufacture of simple plastic mouldings, such as scoopsforsoap powderover the next 18 months. It will concentrate instead on special enclosures forspirits bottles. Ward admitted that Macfarlane had been wrong to transfer the production of simple plastic mouldings from the closed ACW factoryin Aberdeento Kirkintilloch at considerable expense earlier this year. In hindsight it would have been better to have sold the business or closed it down, he said. The closure of Stalybridge is also linked to the new focus on higher added value. The Midlands plant made low-margin goods such as cardboard boxes for television sets. Ward said the Clansman Cases subsidiary of which it formed part would in future concentrate on sophisticated custom-made products such as cardboard boxes for naval torpedoes.AndrewPaisley, a packaging analyst with Edinburgh stockbrokerSutherlands, said the profits warning was ''disappointing,but not entirely unexpected,'' given that Macfarlane had flagged up Russia and electronics as problem areas at its interims in September.He is downgrading his full-year profit forecastby #2m to #15m - a far cry from the #25m that Lord Macfarlane
  3. 3. had been aiming for before his retirement. Most of the skeletons should now be out of the cupboard, but Ward said there might yet be further rationalisation to come at Macfarlane's small plastic mouldings business in Wicklow, Ireland. CommentPage 25 inShare