Norsk Hydro ASA flagged the dismissal of up to 735 employees through 2024 as it launched a restructuring of its rolling business, which has been struggling with high costs and strong competition in recent years.
In the second quarter, underlying EBIT for the rolled products unit plunged 65% year over year to 75 million Norwegian kroner from 212 million kroner due to the weak performance of its rolling mills, lower prices and higher personnel costs. For the full year of 2018, the segment posted an underlying EBIT of 413 million kroner, compared to 380 million kroner in 2017 and 708 million kroner in 2016.
Norsk Hydro said Sept. 10 that 226 workers will be impacted by the closure of parts of the foil production at Grevenbroich in Germany by 2020, while another 117 job cuts were attributed to the company's aim to exit the conversion business by 2019. The rest of the terminations will be carried out by 2024, with the majority expected by the end of 2022.
The company expects the planned layoffs to save up to €60 million per year in personnel costs. Total restructuring costs are pegged at about €160 million, of which €100 million to €120 million will be booked in the third quarter.
The company said its rolled products segment will focus on growth markets such as the automotive and can business, where it made recent investments through a new automotive line at Grevenbroich and a recycling facility for used beverage cans at the Neuss smelter, also in Germany.
As of Sept. 9, US$1 was equivalent to 8.92 Norwegian kroner.
