ArcelorMittal South Africa To Close Facilities, Lay Off 400
08/31/2015 - ArcelorMittal South Africa is planning to close parts of one steel works and has begun studying whether to restructure another, the company said in a statement.
ArcelorMittal said that after reviewing operations at its Vereeniging Works, it has decided to shut down the forge and meltshop, potentially cutting 400 jobs. In light of low prices and competition from inexpensive imports, the company began reviewing the operation in July.
ArcelorMittal said the situation isn't likely to improve anytime soon. In fact, it said trading conditions have worsened since announcing that it was undertaking the review.
Vereeniging makes specialty steel, seamless tube and forged products. ArcelorMittal said it would look to merge the remaining operations there with its Newcastle Works to form a single long products business.
“We anticipate that this decision will help optimize the already high and unsustainable fixed costs of the long steel business,” the company said.
Meanwhile, the company said it is beginning a review of its Vanderbijlpark Works, which, too, is operating unprofitably under current market conditions, ArcelorMittal said. The review is to be completed by the end of October.
"ArcelorMittal South Africa continues to engage constructively with government and labor in an attempt to reduce the impact of the changes, particularly job losses. To this end, the company will first consider implementing alternatives before retrenchments are implemented, as a last resort,” the company said.
ArcelorMittal said the situation isn't likely to improve anytime soon. In fact, it said trading conditions have worsened since announcing that it was undertaking the review.
Vereeniging makes specialty steel, seamless tube and forged products. ArcelorMittal said it would look to merge the remaining operations there with its Newcastle Works to form a single long products business.
“We anticipate that this decision will help optimize the already high and unsustainable fixed costs of the long steel business,” the company said.
Meanwhile, the company said it is beginning a review of its Vanderbijlpark Works, which, too, is operating unprofitably under current market conditions, ArcelorMittal said. The review is to be completed by the end of October.
"ArcelorMittal South Africa continues to engage constructively with government and labor in an attempt to reduce the impact of the changes, particularly job losses. To this end, the company will first consider implementing alternatives before retrenchments are implemented, as a last resort,” the company said.
