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Rautaruukki Plans Temporary, Permanent Production Curtailments

10/08/2008 - Rautaruukki's Ruukki Construction division announces plans to temporarily scale back the manufacture of heavy construction structures at its Ylivieska and Kalajoki plants in Finland, and permanently close a profiling unit in Ostrava, in the Czech Republic.

Rautaruukki's Ruukki Construction division announced plans to temporarily scale back the manufacture of heavy construction structures at its Ylivieska and Kalajoki plants in Finland.
 
The company said it is making the adjustment in an effort to realign production volumes through the end of this year with slightly lower-than-anticipated demand for heavy structures in the Nordic market. Projects currently being tendered for and under negotiation are expected to translate into plant deliveries by the turn of the year or in early 2009 at the earliest.
 
Within the context of the production cutbacks, the company said it would initiate employer-employee negotiations concerning any lay-offs within a week. Any lay-offs are expected to last three months at the most and apply to approximately 50 persons.
 
Ruukki Construction division also is working to improve production efficiency and optimize production capacity and logistics in the Central Eastern European region. The company is taking these actions as part of its new corporate-wide operational excellence program, Boost.
 
In the Czech Republic, the company will close the smaller profiling unit at Ostrava. Machinery from the plant will be gradually relocated to Ruukki's bigger plants in Hungary, Poland and Romania, with the relocation to be completed by the end of the first quarter of 2009. The company said it would initiate employer-employee negotiations covering 81 people at the Ostrava unit as soon as possible. Following closure of the Ostrava unit, the company will source roofing and cladding profiles for the Czech and Slovak markets from Hungary and Poland.
 
In Poland, the company has launched a profitability program at the Oborniki steel frame and sandwich panel plant. The 9-month program is to enhance processes in order to significantly improve the plant's earnings performance. Detailed actions are to be specified as the program progresses.
 
The company said it was taking these actions with the aim of an annual improvement in Ruukki Construction's operating profit of more than EUR 3 million starting in 2009.
 
Rautaruukki supplies metal-based components, systems and integrated systems to the construction and mechanical engineering industries. The company produces a wide selection of metal products and services, has operations in 25 countries, and employs 14,990 people. Net sales in 2007 totaled EUR 3.9 billion. The corporation has used the marketing name Ruukki since 2004.