Seagate's parent will back Derry operation through Covid-19 say directors
THE directors of data storage group Seagate’s operation in Derry have said the US parent group will continue to support it financially through the Covid-19 pandemic.
The Springtown operation makes recording heads for use in data storage media products sold by hard disk manufacturer. Most of the equipment made in Derry ends up in Seagate’s Thailand operation.
A new company report from Seagate Technology (Ireland) said coronavirus had impacted its supply chain and demand, resulting in higher logistics and operational costs.
The Irish operation said it remains dependent on the parent group sourcing products from Derry.
But the directors said that despite the disruption, its parent owner remained cash generative and is expected to “meet their obligations as they fall due”.
The directors said: “The company’s parent undertaking has confirmed it will continue to source products from and provide financial support to the company.”
Some 16 years after it first arrived in Derry with a £50m investment, Seagate remains one of the city’s biggest employers with 1,372 staff.
The latest financial report from the Irish end of the business mainly covers the financial year ending June 2019.
Seagate Technology (Ireland) said sales fell nine per cent to $171m (£131m) over the 12 months to June 28 2019, with profits for the year slipping by six per cent to $12.5m (£9.5m).
The company linked the drop to a fall in demand for read-write heads.
But the report revealed the hard disk drive manufacturer increased its workforce in the north-west by 43 last year.
Seagate’s NASDAQ-listed parent group last week announced its fourth quarter earnings, with the impact of coronavirus pushing revenues down to $2.52 billion (£1.93bn), below forecasts.
Although down on the previous quarter, the group’s senior leadership said revenues were up by six per cent year-over-year.
However, Seagate's Derry operation said the potential impact from Brexit, when the transition period ends on January 1 2021, still remains unclear.
“The company continues to review the commercial impact of Brexit and the related business risks, making contingency plans where appropriate.”