Norsk Hydro starts restructuring of rolling businessChristian Fernsby ▼ | September 11, 2019
As part of the strategic review of Rolled Products, Hydro has decided to initiate a comprehensive restructuring program in its rolling business with the aim to significantly improve profitability.
Europe Hydro’s rolling business has shown disappointing financial performance
Topics: Norsk Hydro restructuring
“We are taking forceful actions to improve our profitability”, says Einar Glomnes, Executive Vice President Rolled Products.
The restructuring includes the planned closure of parts of the foil production at Grevenbroich as well as efficiency measures across the organisation.
“Our cost position in parts of our foil business is too high, mainly due to manning intensive and manual production processes, and we are also facing strong competition in this market segment. As a consequence, we are planning to close our foil mainline,” says Einar Glomnes.
In September 2018, Hydro announced the exit of the foil conversion business by December 31, 2019.
These closures combined represents approx. 30% of the overall foil production of Rolled Products.
The total restructuring consists of a planned reduction of personnel cost of up to EUR 60 million per year.
This will lead to a redundancy of up to 735 full time equivalents (FTEs).
This number includes the FTE reduction of 226 employees through the planned closure of the foil mainline by end of 2020 and 117 FTEs through the exit of the conversion business by end of 2019.
Efficiency measures throughout all Rolled Products sites will close the gap up to 735 FTEs and is planned to be delivered by 2024, with the majority by end of 2022.
These measures are necessary to reduce cost and improve profitability at Rolled Products.
The total restructuring cost is around 160 MEUR, of which 100 to 120 MEUR will be taken as a provision in Q3 2019.
Parts of the manning reduction is dependent on limited capital expenditure.
Rolled Products will further strengthen its focus on growth markets like the automotive and can business, where Hydro has recently made significant investments in the new Automotive Line 3 at Grevenbroich as well as a state-of-the-art recycling facility for Used-Beverage-Cans in Neuss. ■