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Connect Group announces intention to restructure plant in Poperinge

Connect Group NV (Euronext Brussel: CONN) has announced to the work council of its plant in Poperinge the intention to restructure the plant, resulting in the collective dismissal of 23 white-collar and 60 blue-collar employees.

Over the past few years, Connect Group has evolved from a purely subcontracting company producing mainly standard products to a more project-driven technology company with a limited production of standard products. Due to major developments in the market, structural changes are necessary to regain competitiveness. This evolution is the result of a number of factors:

  • The largest customer of the Poperinge plant has relocated his production;
  • The overall economic situation in Western Europe has changed. High wage costs have meant that mass production has been shifted to Eastern Europe, with the focus in Western Europe now being put on technological competence. Our plant in Poperinge thus needs to develop into a technology company focusing on the production of prototypes and specialising in certain sectors;
  • As a result of the high-wage structure existing in Belgium and Western Europe and in an effort to maintain competitiveness, Connect Group has been forced to relocate all mass production to its Eastern Europe production plants in Oradea (Romania) and Kladno (Czech Republic);
  • New potential customers want to fully benefit from the Eastern European plants, demanding that all mass production automatically takes place there.

The Poperinge plant has been suffering from overcapacity and structural losses for several years now, with these continuing to increase. For the reasons stated above, Connect Group is no longer in a position to handle larger production volumes in its Belgian plant at Poperinge. Only prototypes, initial small series of high-end products and specific orders will continue to be produced in Belgium.

This obviously has repercussions on the workforce. We are increasingly being forced to deploy our employees in a multidisciplinary manner, and more deep-going and far-reaching cooperation is needed between the different departments.

We are of the opinion that these structural changes are of crucial importance for Connect Group NV to regain its competitiveness, putting it in a healthy position to deal with the strategic challenges it is facing.

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