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Swedish glassmaker to close Orrefors facility

2 Oct 2012, 10:46

Published: 02 Oct 2012 10:46 GMT+02:00

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New Wave Group, owner of Orrefors Kosta Boda (OKB), on Tuesday issued a profit warning as it announced that glassworks located in Orrefors and Åfors would be shut down.

"With the present economic uncertainty and economic development we don’t see any possibility to achieve an acceptable profitability during a foreseeable future without taking extensive measures," the New Wave Group said in a statement.

Between 2008 and 2012, New Wave Group has invested around 300 million kronor ($45 million) to cover loses at OKB but has yet to help return the operation to profit.

The company also cited the strong Swedish krona as having a negative impact on OKB's export business.

As part of a turnaround effort estimated to cost 212 million kronor, the company plans to move glass production to the glassworks located in Kosta and attempt to sell the shuttered facilities.

OKB will also receive a new CEO in conjunction with the restructuring effort, with Magnus Andersson, most recently CEO of Nimbus Boats, set to take over as CEO on November 5th.

New Wave Group chief financial officer Lars Jönsson said that it wouldn't be impossible for new owners of the glass factories in Orrefors and Åfors to continue production at the facilities, but only on a much smaller scale.

"There may be smaller players who can take over part of it and that would present possibilities, especially in Orrefors. There are hopes that new commercial operations can be started in these facilities, but on a smaller scale," he told the TT news agency.

In addition to concentrating its production at the Kosta glassworks, New Wave Group will also start purchasing finished glass and crystal from other producers.

"We'll reduce our costs significantly by not having production. That will also allow us to better adjust to economic ups and downs," he told TT.

The company expects the restructuring will return OKB to profit by the fourth quarter of 2012 and hopes the measures will ensure the survival of the Orrefors and Kosta Boda trademarks, as well as glass production in Sweden.

Story continues below…

The glassworks in Orrefors was established in 1898 in the same location where an ironworks had been in operation since the early 1700s.

In 1914, Orrefors began producing crystal and artistic glass, earning several prizes in the 1920s.

TT/The Local/dl

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Your comments about this article

11:29 October 2, 2012 by byke
Cracks seem to be starting to show.
12:08 October 2, 2012 by anniegother
A sad, sad thing. Bought some Georg Jensen last year, paid a normal price for the Danish maker, got it home and it was manufactured in China. NEVER AGAIN! Now Swedish glass, a gift appreciated around the world! Especially disturbing is they are blatantly saying that they will "also start purchasing finished glass and crystal from other producers." The strong krona is not only affecting my dollar-based purchasing power here in Sweden, but is obviously doing in the export trade of this once small, but unique and sought after country's exclusive artesian wares. If it says "Designed in ....." let the buyer be wary! Skilled craftsmen here in Sweden are losing their jobs, and it will ultimately hurt the Swedish people, not BIG BUSINESS conglomerates who have no economic base here in Sweden.
12:16 October 2, 2012 by Abe L
We'll be seeing many more of these if we don't let countries like Greece and Spain go bankrupt and keep trying to bail them out. It doesn't help that the Swedish government isn't doing anything to increase spending by families either. We need measures that present more disposable income to the working population, such as income tax cutbacks or other means that create spendable income.
14:00 October 2, 2012 by Mb 65
I keep looking at Orrefors But there is no new designs and some of the old ones were terrible. I use to give them as presents when I visited friends but now I cannot find anything new. The Swedish Krona is and has been so strong for too long.
16:02 October 2, 2012 by Great Scott
@Abe L

Once again you write more garbage, blaming other countries for Sweden's decline. Furthermore you ask for tax cuts that will only benefit the rich. How will you pay for the tax cuts, don't tell me make more cuts in public spending and create more unemployment.

Look at the last tax cuts made by this incompetent government, the restaurant tax, do you pay less when dinning out NO. Do you have more money in your pocket to spend NO.

It is unemployment that is causing companies to close, as deposable incomes reduce.

Tax cuts = unemployment = less spending power = company closure = unemployment, a downward spiral. Work for small businesses is reducing all the time in Sweden.
02:26 October 4, 2012 by anticommie
Tax cuts = unemployment = less spending power = company closure = unemployment, a downward spiral.

^ That has to be the dumbest thing ever printed. Letting people keep the money they earn creates spending. Cut income taxes and cut the amount you give to the lazy bums not working causing them to find a way to earn a living.
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