UPDATE: Sandvik Takes SEK500 Million Charge As Jobs Go In Restructuring
January 18 2012 - 10:27AM
Dow Jones News
Swedish engineering company Sandvik AB (SAND.SK) Wednesday said
it will book a SEK500 million ($73 million) charge in the fourth
quarter as it reduces the workforce in its mining and construction
business by 400 people. The firm will also shut down one of its
production units in Sweden, resulting in 100 job cuts in its
materials technology division.
Sandvik, which makes stainless steel and titanium products and
other high-performance materials, made the cuts as part of a broad
reorganization of its business first announced last September. The
Swedish company said it would split its mining and construction
division in two which would involve job cuts.
"This is nothing to do with the economic climate, this is just
part of a larger re-organization," Sandvik spokesman Anders Wallin
said.
In its latest outlook, Sandvik said it would increase "the level
of readiness to manage any weakening of the economy in the coming
quarters" when it announced third-quarter earnings in November.
Sandvik is due to announce fourth-quarter earnings Feb. 1.
Sandvik said it is cutting jobs worldwide in its mining and
construction business.
In a separate announcement, Sandvik said it would shut down its
wire and resistance-strip operations in the Swedish town
Hallstahammar over the next 18 months which would lead to a loss of
100 jobs there. The move is part of a previously announced
cost-cutting programme for the materials-technology unit that will
reduce costs by around SEK500 million over a two to three year
period.
"Our product portfolio is very consumer related... We're now
moving more toward industrial applications, preferably towards
energy; oil, gas and nuclear power," said Jonas Gustavsson,
president of Sandvik's materials technology unit.
Sandvik said it is transferring some of its wire production to
operations in Sandviken, where the company is headquartered, and to
facilities in India and China. Late last year, Sandvik decided to
stop production of die-cutting products in England and production
of industrial springs in China.
At 1453 GMT shares traded 0.6% higher at SE96.45.
-By Katarina Gustafsson, Dow Jones Newswires +46-8-5451-3097;
katarina.gustafsson@dowjones.com
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