The statement reads:
‘Elmo Leather of Svenljunga, Sweden, has decided to reconstruct and refinance the business in response to the fall in demand after the summer.
Over the past year the company has announced redundancies on four separate occasions. The background to the redundancies is the fast and dramatic cutback in demand for leather in the automotive industry and more recently in the furniture industry. For the August-November period, orders received were down by 53% compared with the same period in 2007 and by 67% compared with the budget forecast for the period.
The outlook in the coming year for tanneries in Sweden and internationally remains uncertain. The problems in the automotive industry directly affect suppliers. Further redundancies in Svenljunga are not considered to be likely to have any short-term impact in improving profitability.
Against this background we have decided to reconstruct the company in accordance with the rules and opportunities presented by Swedish regulations. We expect to continue the business in a reconstructed and refinanced business that includes more owners. The business will be run with a slimmer organisation with lower costs and better adapted to the current market and existing demand.’