Displaying items by tag: Jobs

Germany: The executive board of Humboldt Wedag (HWG), a subsidiary of KHD Humboldt Wedag International (KHD), is preparing to cut approximately 80 jobs. It has made this decision in response to a ‘difficult’ business environment in cement plant construction industry in the near future. It said that in light of this, ‘personnel capacities cannot be sufficiently utilised.’ The measures required to implement the reorganisation will be discussed with the works council soon.

Philippines: Apo Cement is preparing to temporarily lay-off up to 30% of its employees and 40% of its contractors. It has filed a formal notice detailing its intentions with the Department of Labor and Employment in Central Visayas, according to the Philippines News Agency. It says it has been forced into reducing its workforce in response to the on-going suspension of Apo Land and Quarry following landslides in September 2018. APO Land & Quarry supplies raw materials to CHP’s subsidiary Apo Cement, and it is indirectly 40% owned by Mexico’s Cemex.

South Africa: PPC has started a cost cutting campaign at its head office following poor cement sales so far in 2018. A source quoted by Business Report told the newspaper that staff redundancies had taken place already. The fall in sales has been blamed on poor local economic growth, the impact of a value added tax (VAT) increase on consumer spending and problems in the construction industry, including a fall in large infrastructure projects and private non-residential building.

Puerto Rico: Cemex Puerto Rico plans to stop clinker production at its Ponce cement plant. The site will move to grinding cement in January 2018, according to Sin Comillas. The cement producer has been unable to rule out job losses.

The changes come in response to poor cement sales that the company says are the worst in the territory since the 1950s. Cement sales have been falling since 2009 and Hurricanes Irma and Maria punished the market in the autumn with big declines in September and October 2017. At present Cemex Puerto Rico says that the local market only needs around a third of the country’s capacity. However, the Ponce plant has a production capacity of 1.2Mt/yr. The company has also cited high electricity costs as part of its decision.

Germany: ThyssenKrupp’s Industrial Solutions division plans to cut 1500 jobs in operational areas as part of its on-going reorganisation process. Around two-thirds of these positions will be based in Germany. The reduction in jobs follows a previous announcement in July 2017 to cut 500 roles in administration, also mostly in Germany. The job losses are part of the division’s ‘planets’ transformation programme, launched in 2016, which is intended to increase the business area’s competitiveness.

“To ensure Industrial Solutions can compete in the market over the long term, we need a more efficient and effective set-up that goes for our cost structure as for our global presence. Although new orders have recovered from their trough, our structures are still oversized measured against orders in hand and our medium-term requirements. We must be able to respond more flexibly to fluctuations in order intake,” said Peter Feldhaus, chief executive officer (CEO) of Industrial Solutions.

India: The closure of eight cement plants in the Kashmir region due to on-going protests has put the jobs of 50,000 workers in jeopardy. A worker who has spoken to the Greater Kashmir newspaper has said that his factory has been closed since early July 2016 and he has not been paid in that period. Local cement producers are estimated to have lost US$45m as importers have benefitted.

Switzerland: LafargeHolcim has announced that it will shed around 250 jobs as part of a reorganisation of its global operations. The announcement comes following the completion of merger proceedings between the former Lafarge and Holcim.

There will be 250 job reductions in corporate functions by the end of 2017, of which around 130 will be in Holderbank, Switzerland, 80 in L'Isle d'Abeau, France, and the remainder in other global sites in the rest of the world. This represents around 0.25% of LafargeHolcim’s 100,000 staff.

Italy: Unions Feneal Uil, Filca Cisl and Cgil Fillea, representing Italcementi cement workers, are preparing to go on strike on 29 April 2016 in protest against plans by HeidelbergCement to cut jobs when it takes over the Italian cement producer. The German cement manufacturer said that it expects that up to 260 workers will be made redundant and another 170 workers will be offered relocation from Italcementi’s base in Bergamo, according to its integration plan.

The unions met with the government on 14 April 2016 and subsequently agreed to go on strike. The unions have presented a counter-proposal to decrease the number of redundancies, including asking HeidelbergCement to confirm that it will maintain production sites and employment levels through the company integration period until 2020. Other suggestions include requests for government-union review of the plan, maintaining a technical centre in Bergamo and providing an additional social security plan for the entire group. The unions will meet with the government next at the beginning of May 2016.

HeidelbergCement released more detail on its plans to buy Italcementi last week. The main points were that Italcementi’s operations in Belgium will be sold, the Italcementi brand will be retained, its research and development (R&D) centre will assume responsibilities for the entire group and up to 260 job losses are expected in Bergamo. The integration plan is expected to be complete by 2020.

Following an update in HeidelbergCement’s preliminary financial results for 2015 in February 2016, this was more focused on the practicalities of taking over a company. Sales of assets in Belgium were expected from the moment the deal was announced in July 2015. Between them the two companies operate three of the country’s four cement plants, holding 73% of the market by cement production capacity. Selling up Italcementi’s Belgian subsidiary Compagnie des Ciments Belges will maintain the existing market balance. Once this is done, from a cement sector perspective, interaction from the European Commission on the deal should merely be a formality.

Interestingly, no plans to sell assets in the US were announced. This is more ambitious on HeidelbergCement’s part because the acquisition has far bigger implications in that country. Merging Italcementi’s Essroc subsidiary and HeidelbergCement’s Lehigh Hanson subsidiary will see HeidelbergCement become the new second largest cement producer in the US with around 16.4Mt/yr. LafargeHolcim had a relatively easy ride from the Federal Trade Commission (FTC) having to sell two integrated cement plants, two slag grinding plants and a series of terminals. As HeidelbergCement will become the second largest cement producer it seems unlikely that the FTC will be too demanding. However, post-acquisition the cement producer will own cement plants within 75 miles of each other in Pennsylvania and in Maryland and West Virginia. The FTC may take exception to this but perhaps HeidelbergCement is trying their luck to see if it can get away with it.

The decision to retain Italcementi’s i.Lab R&D centre in Bergamo, Italy raises questions about what will happen to the Heidelberg Technology Centre (HTC) in Leimen, Germany. The focus here is on making Bergamo the ‘product’ R&D division for the entire group. i.Lab was opened in early 2012 to fanfare, based in a building designed by architect Richard Meier and it cost Euro40m to build. How this fits with HeidelbergCement’s existing Global R&D team at the HTC remains to be seen.

Job losses of up to 260 personnel at Bergamo are regrettable but hardly unexpected. It may not be much comfort for any staff members facing redundancy but this figure is well below the figures bandied about in the media in late 2015 of first around 1000 and then nearer 500. Another 170 personnel will also be offered relocation packages taking the impact of the reorganisation up to about 400 of Italcementi’s 2500 workforce in Italy.

Looking at the wider situation with the acquisition this week, HeidelbergCement announced a record contract for Norcem, its Norwegian subsidiary, to supply 280,000t of cement over three years for an infrastructure project. Then, Carlo Pesenti, the chief executive officer of Italcementi, was reported making comments about the business’ expansion plans in Thailand and the Association of Southeast Asian Nations (ASEAN). Projects in Myanmar and Cambodia look likely once the acquisition is complete. Finally, the ratings agency Moody’s was drumming up attention for a market report by pointing out the implications for the multinational cement producers in India if a proposed rise in infrastructure spending gets approved. In summary HeidelbergCement and Italcementi are unlikely to benefit due to their southern Indian spread of assets and local production overcapacity.

HeidelbergCement may not be getting it all its own way but the acquisition of Italcementi remains on track so far. All eyes will be on how the US FTC responds to the deal.

Germany/Italy: HeidelbergCement has released details on how it will integrate Italcementi into its business. Key details of the plan include the sale of Italcementi’s Belgium operations, the retention of the Italcementi brand and headquarters and the Italian cement producer’s i.Lab centre will assume research and development responsibilities for the entire group. However the acquisition is expected to result in up to 260 job losses at Italcementi’s base in Bergamo. The full integration plan is expected to be complete by 2020.

“Following our motto ‘all business is local’, it is important for us to preserve Italcementi's strengths and professional expertise, which have ensured its success in Italy and abroad. I am convinced that we will be able to achieve the planned Euro400m in synergies and bring Italcementi back to profits by operational improvements, streamlining the administration and leveraging the increased size of our combined business,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement.

The acquisition still depends on approval from the European Commission and the Federal Trade Commission. On 1 April 2016, HeidelbergCement formally submitted the merger plan to the European Commission.

To this end, HeidelbergCement has decided to sell Italcementi’s entire Belgian operations, primarily consisting of Italcementi’s Belgian subsidiary Compagnie des Ciments Belges. The proposed divestment would remove all overlaps between the activities of HeidelbergCement and Italcementi in Belgium and the Netherlands. Preparations forthe divestment have already started and ‘significant’ interest has been noted. BNP Paribas will support the process.

The plan presented in Bergamo by Scheifele says it intends to keep the industrial network and plants in Italy as well as the Italcementi brand. In addition, HeidelbergCement builds on Italian management heading the Group's operations in Italy. i.Lab, based in Bergamo, where Italcementi will keep the headquarter of Italian country organisation, will become the home of the product research and development division of the whole group.

In order to streamline the overall group organisation some staff and administrative functions will be centralised in Heidelberg. According to the integration plan around 170 people will receive relocation offers to other offices within the group. Any redundancies in Bergamo, which could potentially affect between 230 and 260 people, will be handled using Italy's temporary layoff scheme. In addition, severence packages will be negotiated with the unions. At the end of the transition period in 2020, about 210 to 250 professionals will remain in Bergamo.

HeidelbergCement expects the closing of the acquisition of the 45% stake to be finalised in early July 2016 depending on the decision of the cartel authorities in Europe and the USA. Implementation of the integration plan will start after the closing.