AHSMA to Cut 20% of Workforce, Suspend Investment Plans
06/09/2015 - Mexican steelmaker Altos Hornos de Mexico, S.A.B. said it is suspending its investment plans and cutting its workforce and output in response to a 40 percent drop in steel prices thus far in 2015.
AHMSA said in a filing with the Mexican Stock Exchange Thursday that starting this month it will suspend planned investments totaling 3.9 billion pesos ($251 million).
It also will gradually cut its workforce by 20 percent, equivalent to 4,500 jobs, including 700 management employees and the rest contract employees from maintenance and integrated service firms.
"These adjustments will allow a reduction the cost scale," the company said, adding that "if necessary, additional measures will be applied at a later time."
The steelmaker also said it is being hit by unfair competition, noting that 7 million tons of steel are imported annually, much of it from countries that subsidize their steelmakers or, as in the case of Russia, have experienced a sharp slide in their currency.
Mexico's government has launched investigations into unfair competition and applied tariff measures in specific cases, but that effort has been "insufficient" due to the slow pace of the process, the company said.
Mexican producers do not benefit from tariff protection and also face higher costs related to environmental requirements and other factors, it added.
Source: Fox News Latino
It also will gradually cut its workforce by 20 percent, equivalent to 4,500 jobs, including 700 management employees and the rest contract employees from maintenance and integrated service firms.
"These adjustments will allow a reduction the cost scale," the company said, adding that "if necessary, additional measures will be applied at a later time."
The steelmaker also said it is being hit by unfair competition, noting that 7 million tons of steel are imported annually, much of it from countries that subsidize their steelmakers or, as in the case of Russia, have experienced a sharp slide in their currency.
Mexico's government has launched investigations into unfair competition and applied tariff measures in specific cases, but that effort has been "insufficient" due to the slow pace of the process, the company said.
Mexican producers do not benefit from tariff protection and also face higher costs related to environmental requirements and other factors, it added.
Source: Fox News Latino
Founded in 1942, AHMSA is Mexico's largest integrated steelmaker with an annual production capacity of more than 3.5 million tons of liquid steel and 19,000 employees, including its mining subsidiaries. EFE
