Denmark

Denmark

Blade company turns the corner -- Better year ahead

Having shut two factories in Denmark and after dismissing half its employees in its home country, LM Glasfiber has halted the downward spiral of its fortunes. It expects to reduce a loss of DKK 264 million (EUR 35-40 million) in 2003 to a deficit of just DKK 0-50 million (EUR 6.7 million) this year.

Company head Anders D Christensen points out that more than half the loss last year was made up of expenses connected with closing the two Danish factories and making workforce adjustments. Fixed costs, he adds, are reduced by around DKK 100 million (EUR 13.4 million). In 2004 the company would be in profit, were it not for goodwill write-offs of DKK 106 million.

With the cut backs in Denmark, LM has merely adjusted to the market -- it has not moved jobs out of the country in order to sail under a "flag of convenience" stresses Christensen. Despite the workforce reduction, production capacity has only been reduced by 11% due to employment of 300 staff in factories outside Denmark. LM still has production facilities in its home country and a series in other countries, including the Netherlands, Spain, and India. In 2006 it plans to open a major new factory in Poland.

LM's turnover in 2003, at DKK 1.7 billion (EUR 229.5 million), was 40% down compared with the previous year. In 2004, Christensen anticipates the global wind market as a whole growing by just 0-5%, while LM's turnover will increase by 17-23% to DKK 2.0-2.1 billion (EUR 268.4-281.8 million). He builds his optimism on the fact that LM has orders enough for eight months of production -- twice the volume it had at this time last year.

Next month LM gets a capital injection of DKK 725 million (EUR 97.3 million) from owner Doughty Hanson, a British investment company. This replaces a temporary loan made in preparation for LM's flotation on the stock exchange, now postponed until 2005-2008.

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