PJSC Novolipetsk Steel's Belgian subsidiary, NLMK Clabecq SA, said Jan. 17 that it will halve the headcount of its plant near Ittre as part of restructuring plans to address overcapacity, highlighting the economic difficulties it continues to face.
Clabecq said in a statement that the operation has recently been losing €50 million per year, despite investments of €131 million since 2010, and that significant changes are necessary to safeguard its activities, including cutting its headcount from about 580 to 290.
Clabecq's management blamed global overcapacity, a "considerable" rise in imports to Europe and international protectionism for the increasing difficulties facing steelmakers such as NLMK.
The restructuring is set to reduce Clabecq's production of commercial-quality plates and shift focus instead to niche, high-value-added sheet products, the company said in an interview. The plan includes cost-cutting, "streamlining" production lines and closing some, and layoffs.
Clabecq's management expects the company to become profitable by 2022 but cautioned that closing the plant is an option if a consensus cannot be reached with unions.
The subsidiary, which processes blocks of steel from Russia into sheets of varying thickness, will now begin a redundancy procedure. The first meeting between unions and management is scheduled for Jan. 22.
Novolipetsk on Jan. 18 reported a slight dip in overall steel output in the last quarter of 2018 due to maintenance, but full-year 2018 output grew 2% year on year to 17.5 million tonnes, while sales rose 7% to 17.6 million on higher demand.
At NLMK Belgium Holdings, which includes Clabecq and the company's Italian and French assets, sales increased 14% in the final quarter of 2018 to 540,000 tonnes over the previous quarter. For full year 2018, sales grew 6% to 2.23 million tonnes, mainly due to stronger demand for flat steel, NLMK said.