Finland-based stainless steel producer Outokumpu has announced its new vision and measures to be reached by the end of 2020 to improve competitiveness and financial performance.
Outokumpu stated that, in its new organizational set-up, it will have three business areas: Europe, Americas and Long Products. Europe and Americas will cover Outokumpu’s entire flat products offering in these two markets, including all coil and plate business. Outokumpu’s sales network in the Asia-Pacific (APAC) region will be part of the business area Europe. The planned organization is to be effective as of June 1, 2016.
The company aims to reach an operating profit of €500 million by the end of 2020. It also targets a €100 million reduction in sales, general and administrative costs by the end of 2017 and at least a €200 million cash release from net working capital by the end of this year, particularly through reduction of inventory carry (stainless operations only, excluding ferrochrome operations, and assuming current metal prices).
In addition, Outokumpu will commence consultations with employee representatives in full accordance with local legislation and practices regarding the planned changes that are expected to lead to a reduction of up to 600 jobs. The expected job reductions will be global, and proceed in line with the local practices in each country. At this stage, Outokumpu will now start the consultation process in Finland regarding a reduction of up to 140 jobs and in Sweden for a reduction of up to 90 jobs. Outokumpu also plans to outsource certain manufacturing support operations in Tornio, Finland, that would impact approximately 100 employees. Meanwhile, in the Europe, Middle East and Africa (EMEA) region, Outokumpu plans to reduce personnel from 11,000 at the end of 2015 to a level of 9,300 in the coming years.