Chirk-based Kronospan's profits hit by gas explosion
A gas explosion at Kronospan's Chirk factory and the plunging value of the pound hit profits at the wood panels giant last year.
Newly-published accounts for UK parent company Kronospan Holdings Ltd show that while sales were on an upward curve in the year to September 30, profits fell over the same period.
The weakness of the UK currency proved a double-edged sword for the Austrian-headquartered company.
Sales increased by six per cent to £346.3 million in part thanks to sterling's fall in value after the EU Referendum in June.
But operating profits were lower for the period, falling by 55 per cent to £7.1 million, which was in part because of currency fluctuations, and partly because of a gas explosion which hit the site.
In August last year Kronospan's Chirk site was rocked by the explosion, which did not injure anybody but which is thought to have damaged some of the factory's walls.
A statement accompanying the accounts, signed off by chairman Mike McKenna, said: "The main factor contributing to the sales increase was higher sales volumes and the weakening of sterling.
"The main reason for the lower earnings were reduced production volumes in the UK as a result of the impact of investment projects and a gas explosion, together with the adverse impact of the weakening of sterling on raw material costs."
The company spent £41.1 million its assets over the course of the year, investing money in profit improvement projects for the site.
Kronospan's customer base covers the construction, furniture and DIY sectors in the UK, the Benelux countries of Belgium, the Netherlands and Luxembourg, plus France and Germany.
Despite the changes in the currency already having an effect on the company's top and bottom lines, Kronospan also said it does not expect to be seriously affected by Brexit.
The statement added: "The group do not expect any adverse consequences as a result of Brexit, primarily due to the geographical spread of the customer base."
The number of people employed by the group – which is one of the top 10 manufacturers in Wales – increased over the course of the year, from 894 to 935.
Work has started on an extension at the factory to house a new melamine facing press.
