On the 15th of July 2009, the Central European investment group Penta acquired the organized enterprise of Fabryka Lin i Drutów Drumet Sp.z.o.o., and as of that date is the effective successor which operates under the new legal entity Drumet Liny i Druty Sp. z o.o. ("Drumet").
Drumet’s operating assets constitute the largest steel wires, ropes, and staple bands production facility in Poland. Currently Penta’s main priority is to re-launch production as quickly as possible, though this effort is currently setback by the stoppage of production and the loosening of the company’s market position.
“I am glad that Drumet has gained such a strong and stable owner like Penta. Without a doubt the support of Penta will be invaluable during the rebuilding of Drumet’s market position. This will be a great challenge considering the loss of trust from company suppliers and clients, not to mention difficult market conditions,” said Piotr Murawski, Court Trustee FLID Drumet.
“To Drumet and its employees, we offer financial stability, transparency, and our strong commitment as an owner which has already achieved several successful turnarounds and restructurings. However it must be stated that the company is in a very unfavorable situation. Thus, we would like to ask for the understanding and support of all Drumet stakeholders, particularly our employees, trade unions, suppliers, and customers, and further more, to the local authorities and the media for the measures that must be taken to help Drumet survive and become profitable once again,” Rafal Sosna, investment director of Penta, said.
Due to the near loss of Drumet’s market position, the global recession affecting worldwide steel product producers, and fierce competition on the market particularly from the side of Asian producers, Drumet is forced to accommodate its cost structure including the reduction of employee numbers to realistic levels of production.
“We have started negotiations with the trade unions. Also, the employees have been informed about the necessity to reduce the labor force. Our competitors, suppliers, and the whole steel industry are reducing their output, costs, and thus labor force. Unfortunately nobody can expect that Drumet will act conversely,” added Rafal Sosna.
The reduction of the labor force will be in full accordance with Polish Labour Law and the collective agreement.
The first steps – Penta priorities
- The measures which will lead to the re-launch of production i.e. fulfilling the order book
- Prompt accommodation of the cost structure of the company to realistic levels of production
- The introduction of new management – strong and competent team
About Drumet
- Established in 1895 and based in Wloclawek, Drumet is one of the oldest steel wire producers in Poland and Europe
- In 2007, the company produced 120,000 tons of steel wire products and generated revenues of approximately PLN 424 million
- The company suspended its production activities in February 2009 due to its inability to service its liabilities towards suppliers and creditors
- In January 2009, the company filed for bankruptcy protection, based on which the Economic Court in Wloclawek announced bankruptcy liquidation and appointed an Official Court Receiver
- On the 15th of July 2009, Penta Investments became the effective owner of Drumet’s enterprises (i.e. operating assets and employees), the transaction value is PLN 120 million