Jobs saved as 600 Group sells Poland subsidiary to customer

Machine tool maker 600 Group is to sell its Polish subsidiary FMT, saving the jobs of over 200 Polish workers.

Last month the Leeds-based company announced plans to close FMT, but now a significant customer in Poland has said it wants to buy the company.

The buyer, GDW, will retain FMT’s exclusive license to manufacture and sell Colchester brand conventional lathes in the German market, which is expected to secure a modest licensing revenue stream for 600 Group.

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FMT will also continue to offer machine tool manufacturing service capabilities to 600 Group.

600 Group’s chief executive Nigel Rogers said: “This is great news, especially for more than 200 employees of FMT in Poland, who will be relieved that the purchase by GDW has secured the future of the plant at Tarnow.

“We will continue to offer GDW technical support and co-operation and wish them every success.”

Costs have spiralled at the loss-making manufacturing plant in Tarnow.

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600 Group bought the Polish factory from weapons group Bumar in late 2010 for 1m euros, part of plans to bring a significant proportion of its manufacturing in-house.

Mr Rogers said the problem has been “finding the optimum supply chain in order to satisfy demand”.

“It was quite difficult to keep the score, and that’s related to inventories climbing and the cost base climbing, ” he said. “I recognised it had gone over a tipping point and these costs could not be supported.”

600 Group, which makes products including high-tech lathes for car manufacturers and giant chucks for the oil and gas sector, announced hefty annual losses last month.

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But the group said a £1.5m fundraising and asset sales will cut debt, giving it a solid foundation for growth.

600 Group reported losses of almost £15m for the year to the end of March, compared with £2.9m profits a year earlier. Losses were driven by £12.9m of “special items”, including asset impairments, redundancies and restructuring.

However, revenues rose 8.1 per cent to £39.4m, despite constraints on working capital, and 600 Group said it now has the ability to invest in growth.

“We’ve strong order books looking forward,” said Mr Rogers. “That’s been an overpowering positive despite the changes.”

The firm has plans to move its headquarters back to Heckmondwike from Leeds.

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