Through the program, the company will reduce shifts and close production facilities and distribution centers. More specifically, it intends to:

• Close its Hällefors rolling mill and shift production to other Ovako units. The closure is to be finalized by the summer of 2017.

 

• Close its Forsbacka production and distribution unit and shift volumes elsewhere in the company. The closure is to be finalized during 2016.

 

• Close its Turenki distribution center and consolidate its Finnish distribution to newly acquired facilities in Tampere. The closure is to be finalized in 2016.

• Reduce the number of shifts from four to three for the steel and rolling mill in Hofors, effective Dec. 1. The company already announced plans to reduce production to three shifts at the Hofors tube mill.

The program will affect 300 people and is expected to save the company EUR 45 million. Detailed planning and negotiations with local trade unions will commence immediately, it said.

"We are operating in a market with low expected growth over the next three years. The European production capacity in engineering steel is dimensioned for the market peak in 2007, and this is reflected at Ovako too in terms of overcapacity,” said Ovako CEO Tom Erixon in a statement.

“This is not sustainable in the long term. Hence, we have decided to take action now in order to reduce costs and ensure the future strength of our business," he said.

Ovako makes engineering steel for customers in the bearing, transport and manufacturing industries.