Wittmann Group is rethinking its site strategy.
Europe's high energy costs and the inflation rate, which has disproportionately affected Austria — mainly because wage levels have risen strongly to keep pace with changes in the cost of living and economic conditions — have led to the decision to transfer production elsewhere.
"It's a trend that we are responding to," said President Michael Wittmann.
The production of water flow regulators and temperature control units has been transferred to Hungary, while that of Drymax & Feedmax is in the process of being shifted to Turkey.
"It is certainly not something I wanted to do, but it is a necessary response. Wittmann, based in Vienna, will transform Austria's Wittmann Technology into a development center, with the amount of manufacturing there decreasing over time," he said. "Right now, production is currently running at 75- 80 percent of normal capacity."
Production of some of the injection molding machines — of the SmartPower up to 120t and EcoPower up to 110t — is also being moved to Hungary. The country is becoming an increasingly important location for the group, which has also invested in a second location there for sheet metal fabrication and machining. "It is due to be completed by 2025," Wittmann said.
"Another important facility for us is Turkey. We picked Turkey for a particular reason, namely, to be outside of Europe. The Corporate Sustainability Reporting Directive will be coming into effect, and we don't know exactly what the impact, only that there will be a huge impact on manufacturing."
Turkey is close enough to use truck transportation, thus avoiding any repetition of the container issues experienced during the pandemic.
The group is still looking for the right site and is currently in a temporary location. "We have to prepare to transfer possibly even more manufacturing to Turkey," he said.
Asia is another area where the Wittmann Group is increasing its activities, with a new subsidiary in Ho Chi Minh City, Vietnam, along with operations in the Philippines and India, where a new 54,000-square-foot production facility will open June 1 where Indian products specifically for the Indian market will be made.
"Even China is opening up again, after the shutdowns during the pandemic."