TEMPUS program at Saurer Textile saves over Euro 50mn

10 Mar '06

3 min read

Textile embroidery & twisting machines maker Saurer Management AG announced that in 2005, Saurer's business maintained a level similar to that of the previous year. Gradual growth continued in Transmission Systems but was accompanied by declining volumes in the textile sector, caused mainly by weaker demand from China as expected.

The business efficiency program TEMPUS was concluded, exceeding expectations and enabling cost savings of over EUR 50m, and alongside this, some important foundations were laid for Saurer's growth in the next years.

These derived from a step change in Saurer's priorities. Out of the strong focus on business processes, the supply chain and cost reductions to minimize our exposure to cyclical business downturns (TEMPUS) came a series of projects in all business units to exploit new business opportunities with maximum energy and efficiency.

This included significant investments in development of new products, new production and sales structures in Asia, the acquisition of Fairfield, long-sought-after complement to Graziano, and a number of smaller technology companies acquired in the textile sector. Once they are fully integrated, these acquisitions collectively will have a sales potential of over EUR 300m with an above average profit contribution.

However, even the very significant fixed cost reductions from the TEMPUS program – EUR 50m over the last two years – were not enough to compensate for the loss of margins caused by lower sales, the unfavorable product and country mix, the startup costs of the growth program and the absence of last year's non-recurring income. In 2005 Saurer's order intake reached EUR 1 464m (–13 percent compared with EUR 1 690m in 2004).

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