BOWMANVILLE, Ontario—ContiTech A.G.'s Conveyor Belt Group is closing its plant in Bowmanville by mid-2016 because of global economic downturn in mining sectors, particularly in the coal industry.
The Hanover, Germany-based company said in a statement that it faced excess conveyor belt capacity throughout the North American region and worldwide and that a review of its manufacturing footprint and production capabilities had led to the decision to close the plant.
The closure will affect 135 employees.
The firm said the worldwide mining industry has been in a slump for many months now because of decreasing demand for their products and depressed prices for their commodities.
“This is one of the reasons that many mining companies are not investing as much as they did five or ten years ago. In addition, there are political and economic uncertainties in regions which are important markets in the mining world,” said Hannes Friederichsen, head of business unit Conveyor Belt Group.
“This year, 71 major mines around the world have been forced to close, with 17 of them closing between July and September alone.”
ContiTech said it would relocate production of heavy-weight conveyor belts, both steel and fabric reinforced, custom mixing and rubber based adhesives from Bowmanville to other ContiTech plants within the region over the next months.
ContiTech acquired the Bowmanville plant at the beginning of 2015 as part of its acquisition of Veyance Technologies.
“These decisions aren't taken lightly and are very difficult to make but unfortunately some restructuring is necessary given the current situation,” indicated Friederichsen.