House of York factory to close

2008-06-17 00:00

Pietermaritzburg manufacturer and marketer of wooden household products House of York will shut down local operations soon — once the sale of the company to battery manufacturing giant Eveready South Africa is approved by the Competition Commission.

Managing director Alan Lukan told The Witness that the manufacturing operations will now be re-commissioned in Port Elizabeth.

House of York was established in 1981 in Westville and relocated to Pietermaritzburg in 1984.

About 180 people are employed at House of York, 160 of whom are directly involved in the production process in the 7 500-square-metre facility.

Although their fate has not yet been decided, Lukan conceded that many staff members are likely to be retrenched. “It is reasonable to say that most staff will not be relocated to Port Elizabeth. Negotiations with staff are ongoing,” he added.

A member of Steinhoff International Holdings, House of York’s head office and factory are in the Pentrich Road area.

Although the local business is solid, Lukan said, margins are under pressure due to the structure of the operation and costs continue to increase.

Lukan said Steinhoff has changed its focus area from manufacturing and marketing to retail.

He added that Eveready, which will have to move the operations to Port Elizabeth in order for the deal to be viable, is particularly interested in the marketing and distribution side of the business.

The deal has been in the making for about four months.

Lukan said the sale has to be approved by the Competition Commission because Eveready is the dominant market player in its field.

He said the sale is likely to be given the nod by the commission, due to the fact that the acquisition of a household products company will not have an impact on Eveready’s core market area.

The approval process could take about a month to complete.

The factory makes a variety of products, including hanging racks, paper towel holders, wine racks, spice racks, laundry items and other consumables.

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