Fenner UK business hit by Ukraine conflict

London – Fenner Dunlop is making every effort to “reinvent” its conveyor belt-manufacturing business in Hull, north east England, according to the company’s chief executive Nicolas Hobson.

Speaking to ERJ, Hobson said that the Marfleet business, based in Hull, was going through a rough time due to political developments in Russia and the Ukraine.

Generally-speaking, mining operations all around the world have slowed down over the last two years and mining commodity prices have dropped, noted the CEO.

“Mining companies such as BHP, Rio Tinto and AngloAmerican, with which we work, have had their earnings down and the whole business is in recession globally.

“So, our conveyor belt business is now the victim of this mining commodity recession,” he said.

However, according to Hobson, in Marfleet, the problem is specific to Fenner.

“A significant part of Marfleet’s revenue was from selling its products to miners in Ukraine and Russia,” said Hobson.

Most of the mines in Ukraine are located in the eastern part which is now involved in the Russia-Ukraine dispute, said Hobson adding: “our revenue from Ukraine has almost entirely dried up”.

As for Russia, due to the Ukraine dispute, due to international economic sanctions and the oil price drop, the Russian currency has almost halved over the past two years which means our products are too expensive for them to import, he noted.

“So, demand from our customers is substantially lower than say three-four years ago,” said Hobson.

Defying the current adverse situation, however, Hobson said that everybody is “actively involved” in coming up with solutions to reinvent the Marfleet business.

“It has happened in the past and the factory has managed to revive itself from a UK mining market-oriented plant to an export-orientated one,” Hobson said.

We are not in a great place right now, but we are very committed to reviving the business, he concluded.

Hobson declined to comment on what solutions might be on the able to reinvent the Marfleet business, saying it was commercially inappropriate.

Fenner announced earlier in 2014 that its Engineered Conveyor Solutions (ECS) division, the group’s largest operation, was being restructured at the top level to respond to the “continual change” in the market and the global mining industry.