THE owners of Chirk-based wood factory Kronospan have warned they expect cost reductions to stay in place because of the impact of Covid-19, newly-published accounts show.

The yearly financial report for Kronospan Holdings Ltd, which owns and operates the factory, in Maesgwyn Road, announced its yearly sales of wood products had dropped from £362.1 million to £341.9 million – around £20 million.

However, the group has announced that its earnings before interest, taxes, depreciation, and amortization (EBITDA) – a measure of profit – has risen from £27.4 million to £44.2 million.

In its opening statement, the firm said: "The initial adverse impact following the Covid-19 lockdown was severe as many of our customers closed for business.

"However, we continued to be open for business and demand recovered over the following months.

"There was an increased focus on cost reduction during the lockdown period.

"We are confident that will be sustained as the nation learns to adapt to the frequently changing circumstances around Covid-19.

"Although many certainties remain, we are well positioned to meet the potential challenges.

"Expenditure on fixed assets at £30.4 million was a decrease on the previous year's expenditure of £89.4 million – the business continued to undergo a major period of investment to improve production capacity, quality and operational performance."

The report also stated that Kronospan Holdings has removed its Luxembourg operations to focus on its UK work with more than £200 million of investment across six years.

It also pointed to its strong local Welsh workforce and relationships with local business that it intends to strengthen for a bigger market share.

The sole focus on a UK market has led owners to believe that Brexit will not have an impact on operations as the customer base is largely based in this country.

The report added: "The Groups' customer base cover the construction, furniture and DIY sector in the UK.

"This means that the risk to the business of a major loss on customer widely spread.

"However, it is important to maintain a high level of customer service and attractive productive range.

"While we are operating in potentially high risk sectors, strict credit control procedures are in place to mitigate any losses.

"The Group do not expect any adverse consequences as a result of Brexit, primarily due to the company's predominantly domestic customer base."