Evowood's Estcourt mill reopens

Hardboard manufacturer, Evowood (formerly Masonite), has reopened its Estcourt mill after a protracted strike which began in March.

Louis Marais, the chief executive of Evowood, confirmed that the mill was operating and that 242 of the 733 workers who had lost their jobs as a result of the work stoppage had been offered re-employment on a contract basis.

"We have adopted a phased approach to the start-up due to the damage caused to equipment as a direct result of the strike. On the primary side of the mill, we are currently running one press line. The secondary side of the mill is fully operational," he said.

This output, together with stock on hand, will be sufficient to meet all current customer requirements.

Marais said that losses as a result of the strike were substantial and were estimated to be close to R70 million. However, he said the company shareholders Black Bird Capital and Jacobs Capital were bullish about the company's potential to recover.

This was based on a new business model and some restructuring in response to the strike.

Black Bird Capital and Jacobs Capital bought the company out of business rescue and took control in August 2016. The initial business plan that was put in place to create a sustainable long term future for the business entailed upgrading equipment, rebranding the company as Evowood and controlling spiralling costs at the mill.

After a lengthy negotiation process, the workforce signed an agreement on 25 November 2016 that stipulated a reduction of 12 percent of the total cost to company of every employee to be implemented from 1 February 2017.

The formal agreement, signed by all stakeholders, ensured that there would be no retrenchments at the mill. However, when implemented, workers brought production at the mill to a halt and embarked on a strike.

"Our business has historically always comprised production, sales and distribution units with outsourced procurement when required. Since the new shareholders took over the business, our intention was to ensure that our Estcourt Mill operated at full capacity. The unfortunate turn of events has changed our focus to a model that better supports a combination of local production at the mill and external procurement," Marais explained.

He said that the recent disruption at the Estcourt Mill had made ensuring that customers enjoyed an uninterrupted and continued supply of quality product through an improved distribution model a priority.

"Our commitment to building business in South Africa remains firmly in place," he said.

The Evowood procurement division has successfully secured additional product from the company's supply partners to ensure stock is available to meet all future requirements.

"This business model, which focusses on distribution of our own manufactured products as well as insourced supply, will also allow us to extend our range of products," he concluded.

Source: Evowood