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TDK to shut down ferrite plant in Hungary

The Hungarian unit of Japanese electronics manufacturer TDK will shut down its ferrite plant by the end of March, the plant's HR director Zsolt Vadadi said on Thursday. The shutdown will result in the loss of 107 jobs.

The plant has been making losses for seven years, Vadadi said, adding that losses in 2005 came to Ft 50 million a month. Demand for ferrite and ferrite transformer cores has dropped a third in Europe over the past several years, and European manufacturers can no longer compete with Chinese ones, he said.

TDK will continue to make transformers, chip inductors and chip condensers at its Hungarian unit, keeping 160-170 jobs. The company expects its operation in Rétság, north Hungary to close its business year ending March 31 with revenue of €58 million, down from €65 million in the previous year. The unit expects losses of €700,000 in this business year, compared to losses of €190,000 a year earlier.

TDK set up its plant in Rétság ten year ago, receiving a ten-year exemption from local business tax from the local council. Vadadi said there was no connection between the end of the exemption and the plant's closure.