Business shuts down a location, resulting in job losses for 90 workers
In a significant development, Tegometall Lagertechnik GmbH, a renowned manufacturer of pallet and heavy-duty rack systems, has announced the closure of its plant in Sauldorf, Germany. The decision, effective by the end of September 2023, will affect around 90 employees, including management.
The closure is due to a combination of factors, including a drop in orders of more than 60%, rising energy and raw material prices, and increased competition from non-European providers, particularly from China and Turkey. Tegometall has found it challenging to compete with the lower steel prices, tariffs, and energy costs in these regions.
Even if the employees were to work for free, they couldn't offer a cheaper deal, according to the company's management. The rest of the employees will have to turn to the employment office for new opportunities.
The plant's logistics division will be largely abandoned, and the manufacturing facilities and production hall in Sauldorf remain undecided regarding their future state.
Managing Director Arndt Lüdtke emphasised that the decision to close the Tegometall plant in Sauldorf was not taken lightly. He stated, "We have explored other industries for supply and production, but opportunities are currently limited."
Orders from large retail chains like Ikea and Lidl, which the Sauldorf plant has equipped in the past, will not resume in the long term. However, Tegometall's headquarters in Lengwil, Switzerland, and additional sites in Poland, Slovenia, and the UK will continue operations.
The Tegometall plant in Poland will produce a small number of storage racks and serve customers in the DIY sector. Store construction will be the new core business of Tegometall, with a few employees from the Sauldorf plant potentially applying for open positions at the sister company for store construction in Krauchenwies.
Many customers are in crisis mode and not investing large sums, which has further compounded the challenges faced by Tegometall in Sauldorf. There is no publicly available information about major customers of Tegometall Lagertechnik GmbH in Sauldorf announcing that they will not place orders in the coming years.
Despite this setback, Tegometall has been a stalwart in the industry for 35 years, manufacturing pallet and heavy-duty rack systems for large retail chains and hardware stores in Sauldorf. The company will continue to strive for success in its new core business of store construction.
