Last week Zanders GmbH issued a press release regarding the continued restructuring process for the company. The release included a sentiment that we don’t often hear in these types of announcements: optimism.
Direct quote: “Everyone involved is optimistic that they will be able to create a stable future for Zanders.”
This is in part due to the different nature of insolvency proceedings in Germany versus the U.S. The German government participates in these types of actions with an eye to protecting workers and jobs. One of the considerations not cited in the press release was the impact of Zander’s pension obligations on the viability of the company. While the number of employees has been reduced in past years, the company still had pension obligations to over 2,000 individuals. As part of restructuring, the pensions will be managed by the government in cooperation with the Pension Assurance Association. One of the key roles of the occupational pension system in Germany is the protection of employee benefits in the case of insolvency. The result of relief in pension obligations will reduce monthly costs by up to $4 million per month.
Of course Zanders is facing the same challenges as the rest of the company with dramatic increases in raw materials costs. Prices increases of over 40% on materials such as pulp, chemicals and coal for the company’s power plant over the past year will continue to be a challenge to profitability.
Despite those challenges, it is business as usual for Zanders in the US. The company announced the launch of of Zanjet, a coated inkjet paper available in a Gloss and Silk finish and the company continues to invest in paper R & D. So, while the overall health of the company bears continued scrutiny, the situation seems to be worthy of optimism.