KBA is to be split into four autonomous divisions under management plans approved yesterday.

Between 1100 and 1500 jobs would be affected and tens of millions of Euros written off in the ‘realignment’ plans which see separate divisions for web and sheetfed business, manufacturing and special applications.

The management board of the Würzburg, Germany, based press manufacturer has presented the concept for the group’s strategic realignment to a meeting of its supervisory board today. Included are a package of measures aimed at strengthening long term profitability and future development potential.

A spokesman says attention centres on sustainable structural adjustments to secure core business activities, the optimisation and concentration of value creation at the various locations, and changes to organisational structures within the group, placing a focus on future growth fields. “After in-depth deliberations, the supervisory board has approved the concept,” he says.

The plan is a response to changes in the worldwide print industry’s media sector, “characterised by concentration processes among publishers and printers and overall reshaping of the print branch”. The consequence is a continued reluctance to invest, which has led to significant excess capacities across the whole press manufacturing industry.

The world market for web presses has contracted by around 70 per cent and that for sheetfed presses halved in recent years. Lasting reversal of the slump in web business is not expected, while sheetfed will stagnate. In recent months, a corporate strategy under the heading ‘fit@all’ has been expanded with measures to strengthen long-term competitiveness and profitability.

President and chief executive Claus Bolza-Schünemann says “swift and radical restructuring” will facilitate development into a decentrally organised and highly flexible press manufacturing company which – complementing its core business – is active above all in profitable niche markets.

“With this decision, we have laid the foundations for sustainable realignment and interesting future prospects,” he says. “The essential basis, however, is initially consolidation of our core business activities.”

The annual meeting in May will have to approve measures which include:

• establishing divisions with clearly defined profit responsibilities for sheetfed presses, web presses, special applications and manufacturing. Metal decorating, security presses and the of recently acquired Kammann Maschinenbau and Flexotecnica will be part of the special applications division.

• targeting structural and process optimisation in the sheetfed division, with capacity and personnel adjustments, and “solutions” for under-performing product segments and sales units.

• web press activities switch a business model based on labour flexibility with personnel adjustments necessary.

Production is being reorganised at the five European locations – Würzburg, Radebeul, Frankenthal, Mödling (Austria) and Dobruška (Czech Republic) – with closures and disposals “not excluded”, and headquarters administrative expenses to be reduced. Between 1100 and 1500 jobs will be affected across the group. Non-cash impairments in the “middle double-digit million euro range” will affect the 2013 balance sheet, and additional costs will depend on employee negotiations.

“We have made some far-reaching decisions for KBA today,” says Bolza-Schünemann. “They will also be accompanied by painful cuts for the workforce. It was not easy for us to make these decisions, but they are unfortunately imperative for the future sustainability of our company.

He says the first fruits of these changes should be seen in 2015, and a return to sustainable profitability in 2016 “at the latest”.