VIENNA, Austria—As Semperit A.G. Holding rides a wave of profits into 2021, the firm's CEO has made it clear that its medical products business, Sempermed, will remain part of its operation for at least the first half of the new year.
In January, the company said it planned to sell the medical business—but that was before the global COVID-19 pandemic fully surfaced. The firm's goal at the time was to move out of the medical sector and transform Semperit into a company solely focused on its expanding industrial businesses: Semperflex, Sempertrans, Semperseal and Semperform.
That plan changed rapidly as the pandemic swept through the world, and Semperit decided to temporarily suspend plans to sell Sempermed.
It proved fortunate that the Vienna-headquartered firm, which was founded in 1824, held onto the operation, since it primarily produces surgical gloves at the firm's main facility in Wimpassing, Austria, and examination and protection gloves at its plant in Kamunting, Malaysia.
Sempermed employs about 3,000 and distributes its gloves globally, including to the U.S. and throughout North America, a company spokeswoman said.
In the company's latest financial report, issued Nov. 19, Martin Fuellenbach, CEO of Semperit A.G. Holding, noted that Sempermed has been the prime reason the company "has very successfully coped with the year 2020."
He added, though, that while the positive developments are primarily due to the exceptional boom in the need for medical products such as gloves, "they are also the result of comprehensive restructuring measures as well as stringent crisis management throughout the Semperit Group."
As it stands now, the company plans to "resume work on the implementation of our strategic landmark decision to separate from the medical business in mid-2021, at the earliest," the spokeswoman said.
Semperit recorded consolidated revenue of about $790.4 million in the first nine months of 2020, up 0.8 percent from the period last year.
Sales of the medical business rose 27.5 percent from the previous year to $346.5 million, while the industrial segment's revenues fell 13.4 percent to $443 million.
While sales of the industrial business were down from those reported in the same nine-month period in 2019, the company's top officials said in the late November report that restructuring and transformation measures—as well as those used to combat the COVID-19 pandemic along with increased customer proximity and strict cost management—partially offset the negative effects.
Semperit's restructuring and transformation process began in early 2018 and has led to significant improvements at various levels, they said, adding that the focus on cost-cutting measures will continue in the coming months.
In terms of when the businesses that make up the firm's industrial segment will bounce back, the spokeswoman noted that, "depending on the second wave of the pandemic, we expect a different pace of recovery" for each operation.
For Semperflex, which produces hydraulic and industrial hoses, a slow market recovery is expected. There's only short-term visibility for Sempertrans, a conveyor belt manufacturer, and Semperform, a producer of handrails, sheave and bull wheel liners. Semperseal, a maker of profiles and rubber sheeting, will be supported by the recovery of the construction industry, she said.
Recovery likely will take longer in many countries than in others, the financial report predicted, and prices for raw materials relevant to Semperit have climbed sharply in recent months.
Those market-relevant factors will impact the company's business as it moves forward, the report noted.
Fuellenbach said that even if a broadly effective vaccine against the virus becomes available in the near future, "we will experience pandemic-related positive effects from the medical business well into 2021.
"All in all, from today's point of view, our planning is therefore based on the assumption that we will be able to maintain the 2020 result in the coming year at the same range or even surpass it again."