British flooring group Victoria, owner of Belgium's Balta, recently announced a sweeping restructuring plan involving 529 job losses. According to CEO Philippe Hamers, this decision has become inevitable due to persistently high production costs in Belgium. 'Manufacturing in Belgium has simply become too expensive for volume-related and labour-intensive products,' Hamers stated. 'I also see no change in policy either at the Flemish or federal level.'
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After acquiring Balta in 2022, Victoria soon noticed two bottlenecks: too much production capacity in Belgium and a limited market for broadloom carpet. Therefore, production was partly transferred to Turkey and the UK. Now a further reduction in scale will follow: production in Belgium will drop from 50% to 10%, with the rest moving to Turkey. Only support services, logistics and finishing remain in West Flanders.
'The social plan is not a gift plan,' Hamers stresses. 'We take our responsibility, but there is little margin to further reduce the number of redundancies.' The planned relocation of machinery to Turkey represents a far-reaching delocalisation. 'There, we can significantly reduce our costs,' he says.
Although global market demand remains weak, Hamers believes in the future of carpet. "We are diversified geographically and product-wise. That diversification is our strength." On Belgian policy, he is critical: 'The democratic process is stuck. There is hardly any fundamental intervention.'
Source: Made In