Its special area of expertise, in which it is a global leader, are all types of trailers for transport and spreading of natural manure. The Group has factories in Belgium, France, and Poland, which will soon be joined by a new entity of a surface area of ca. 15,000 m², constructed on a 6 hectare plot in Sanem/Esch-sur-Alzette, in the Grand Duchy of Luxembourg.

Victor Joskin, the General Director and founder of the Group, established 55 years ago, answers questions concerning this investment.

What are the grounds for construction of the new factory? Is it associated with satisfying the increased demand?

Today, manufacturing capacities represent the greatest challenge for JOSKIN – the Group must be able to produce more, This means not only its ability to supply more machines from its current range, but also preparing place for equipment that is currently being developed, so we can satisfy the demand of the increasing number of customers in about 60 countries all over the world, which we regularly supply. This aim requires expanding of the available surface area and reorganisation of production processes. The project to construct the factory in the southern part of the Grand Duchy of Luxembourg is the first in the series of similar projects, in consequence of which the JOSKIN Group should eventually have specialised manufacturing, including assembling facilities, able to achieve main productivity by focusing on models of the uniform design.

How is selection of Luxembourg as a site for construction of the new factory explained?

At the beginning, let’s explain that it is not to avoid taxes. The corporate tax rate in the Grand Duchy is slightly higher, and possible tax exemption in the first years does not apply to the project that is ready to be submitted. The JOSKIN Group mainly wants to focus on manufacturing machines, to satisfy its increasing numbers of our customers all over the world.

In the case of such projects, it is necessary to ensure availability of sufficiently large grounds in an appropriate location. Furthermore, availability of employees and friendly environment are also of importance, and all this should be as close as possible to the logistic network of the company, i.e., its transport routes and sales markets. Following the intense search, we finally selected the site of a former steam and gas power plant, Twinerg, which was demolished and the lot was cleaned under supervision of the Luxembourg government. This place, located at the former metallurgical centre, at a border between Sanem and Esch-sur-Alzette communes in the southern part of the Grand Duchy, meets all criteria necessary to execute this project. We did not find any other in Europe.

The labour availability was also one of the crucial parameters when selecting this location. In the ageing metallurgical centre in the southern part of Luxembourg, technical labour probably is not scarce. However, if it is insufficient, the Grand Duchy of Luxembourg is also an attractive country for foreign employees, and this is confirmed by employment statistics. This is definitely explained by the level of employee costs, as the rate of what remains in their pocket in relation to the gross salary is very advantageous. According to the France Inter radio documentary from March 2019, salaries in Luxembourg were to be about 46% higher for people living in northern Lorraine who suffered due to liquidation of the metallurgical industry. Every day, over 100 thousand of them cross the border, despite problems associated with commuting. Therefore, work available at 10 minutes bus ride from the station in Esch should interest many welders, fitters, paint sprayers, etc., left empty-handed by the metallurgical industry. And what applies to inhabitants of Rédange, Longwy or Villerupt in France, probably also concerns people living in Athus, Aubange or Messancy in Belgium. It is true that beginnings of phasing out the metallurgical industry in that region are relatively distant, but the history, mentality, respect and pride in the work in the technical sector are still alive, while they may be hard to find anywhere else.

Was it not possible to expand facilities in Soumagne?

It was not possible at our five existing plants in Belgium, Poland and France, mainly due to a lack of space. This situation is particularly critical in Soumagne, Belgium, where each previously considered idea failed. Furthermore, for about 20–25 years we have been experiencing here a regular shortage of well-qualified workers, and preventive actions in this respect have been implemented at a very slow rate. Recruiting and employing foreign employees is an exhaustive process with an uncertain outcome, and which result can also be unfortunate, when the found and trained employee is hired away by somebody offering a little bit more in remuneration.

What will the Luxembourg plant manufacture and what is its planned capacity?

The project is focused mainly on assembling of large agricultural trailers with a shell cargo box, i.e., welded to form one piece. We will start with dumpers, and later we will also start production of manure spreaders. Maybe, we will also add some other supplementary product, depending on the achieved level of production capacity. Ultimately, the factory is designed to achieve a capacity of five trailers a day, but the business plan assumes a little over four trailers a day on average. For those not knowing our industry, this may not seem a lot, but it should be noted that at some competitive manufacturers this number represents a monthly, or even a yearly production! If this project is quickly implemented, then in 2027, some 2.5 thousand JOSKIN trailers manufactured in the Grand Duchy of Luxembourg should drive in villages all over the world!

 Are the financial expenditures on this project still consistent with initial estimations, in the current economic situation? Are possible rises foreseen in them?

Three years ago, the initial infrastructure was valued at about EUR 14.5 million, but recently, in a Luxembourg journal, we provided the estimated amount of EUR 20 million for the entire project. Meanwhile, a great pressure appeared in the construction industry, due to inflation. On the other hand, the plan also had to change, not only in terms of studies and OHS equipment, but also in terms of automation. Furthermore, the general valuation does not end with walls and main infrastructure. It covers the initial costs associated with an analysis and transformation of the internal organisation to adapt to the new specialised and normalised production processes. The entire cost of this production unit is therefore difficult to foreseen in these uneasy times, but it should be emphasised that it is an investment, and not the expenditure. It is a project crucial for the future of JOSKIN, that is, for every employee of the Group at five current production sites and each JOSKIN distributor in 60 countries all over the world that we supply on a regular basis. In other words, uncertainty of this type does not weaken our determination to go forward.

What is a date for starting the new plant?

Submission of applications for the building permit and the environmental permit was delayed, among others, because of various detailed initial analyses. Now, JOSKIN hopes that it can count on efficient operation of local authorities, so the first sod can be turned in January 2023. The project was already delayed due to the sanitary crisis, so JOSKIN expects that analyses conducted at the initial stage will accelerate issuing of permits. Especially, taking into account the fact that basic equipment of the plant, that is, elements of the line for surface processing, were already ordered some time ago. Any change in the installation date may lead to significant fees for the delay. However, we have to wait for the permits to be able to order construction and finalise the purchase of the ground. So we are now appealing to the authorities!

JOSKIN counts on fast performance of construction works, so the factory can start to operate in the fourth quarter of 2023, or preferably, already in October. At the standard pace of works, i.e., after the start-up period, the employment may reach one hundred people (mainly fitters and welders), depending on the implemented level of automation. JOSKIN plans to organise the assembling in accordance with the just-in-time principle, using the assembling system on several stations, with carts with elements for installation remotely controlled by the WiFi network or Bluetooth. Therefore, the operations will develop gradually.

Will the opening of the new factory affect operations of some or all plants, including that in Soumagne?

We do not know yet how far we will get with this new strategy; however, our personal experience from last 25 years shows that development by creating new plants and increasing automation never meant reduction in operations of any other unit, and in particular, a reduction in employment. On the contrary, now, the current assembling plants are operating at their full capacity and cannot house additional production. However, we can increase production series of welded components and accessories. The aim is to increase the production capacity, so it means lower own costs, and therefore improved competitive edge.

What will be the influence of the new plant on the employment level in the JOSKIN Group?

Today, the employment level in the JOSKIN Group is 880 employees on average, of which 415 people works in Belgium, mainly in Soumagne, and also in Andrimont. The evolution of employment in Belgium will depend on a possibility tp get space for development offered to JOSKIN, and on solutions implemented by social and political factors to overcome labour shortages. JOSKIN expects that in next five years, the total employment in the Group will reach 1100–1200 people, of which one hundred will work at the Luxembourg plant, as I have already mentioned.