SKF Closure Will Put 133 Staff Out of Work

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May 10,2007

SKF Closure Will Put 133 Staff Out of Work SKF South Africa, the wholly owned subsidiary of the Swedish-based ball bearing maker, will close its Uitenhage factory at the end of June, resulting in the loss of 133 jobs. Johan Garbers, managing director of SKF South Africa, confirmed the factory closure, adding that a comprehensive severance package for the 133 employees, equal to a total of R32.2 million, had been agreed with the National Union of Metalworkers of SA and the United Association of SA. Garbers said the decision was taken to close the factory because it did not have economies of scale, due to the size of the factory, and it was too far from its markets and customers. The relative strength of the rand and an almost 100 percent dependency on imported raw materials meant it was unable to compete in either the domestic or international markets, despite many growth initiatives and cost cutting measures over several years. This had a negative impact on the company's financial performance for a number of years. SKF's Uitenhage factory, established in 1964, produces single- and double-row ball bearings. Its annual production capacity is about 10 million bearings. It has been part of the SKF global manufacturing system for the past 10 years and more than 90 percent of its product has been exported. Products manufactured in Uitenhage will be transferred to other plants within the SKF group. Garbers said the ball bearings manufactured in the Uitenhage factory were for world consumption and comprised a huge variety with fairly low volumes. They were for use in the general industrial arena, with some going into the automotive industry.

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