Outokumpu to close steel rolling mill in Sheffield next year
Finnish refined steel manufacturer Outokumpu announced on Tuesday that it is dismantling its excess capacity by shutting down its somewhat outdated stainless steel cold rolling plant Coil Products Sheffield (CPS) in Britain. The Sheffield facility, which has produced just under 300,000 tonnes of cold-rolled steel a year, and which employs 570 people, is to be closed down by the end of April.
Excess capacity in steel production, dismantling stocks of manufactured materials, lower prices of finished products, and higher prices of raw materials put Outokumpu EUR 21 million in the red in the third quarter of this year.
"This came as a surprise. The workers are shocked", said Roy Baker, chairman of the Steel Industry Management Association.
The workers at the plant were informed of the impending loss of their jobs as they arrived at work.
Baker said that the move would not be shrugged off, and that British MPs would hear about it. In his view some of the jobs could be saved if Outokumpu would draw up a new business plan.
Remaining in Sheffield will be the melt shop and the manufacture of long products, as well as plate operations. The output capacity of the Sheffield Melt Shop will be reduced from the present 500,000 tonnes to 300,000 tonnes a year.
Jobs are expected to be cut at the Outokumpu facility in Avesta, Sweden, which provides the Sheffield facility with blanks.
The closure of CPS is expected to raise Outokumpu’s profitability by about EUR 50 million as of the second half of next year.
Already in September, Outokumpu moved new orders for the Sheffield plant to the Finnish facility in Tornio, so that the company’s largest and most efficient facility can be used at full capacity.
Outokumpu is in the midst of a cost-cutting campaign aimed at saving ten percent of fixed costs. As of 2008 the company hopes that its cost-cutting programme will bring monetary benefits of EUR 160 million a year.
Previously in HS International Edition:
Loss-making Outokumpu to reduce costs - job cuts expected (27.9.2005)
Outokumpu press release 25.10. Weak market conditions turned third quarter negative – decisive change program initiated
Outokumpu press release 25.10. Outokumpu to cease its UK coil products operation in Sheffield