In response to fast but structural changes in the global solar energy market, to growing uncertainty in other markets and to longer term overall instability, Bekaert has announced today a major realignment program, consisting of two lines of action:
- actions directly related to the changed market environment include the measures and plans to rightsize Bekaert’s global sawing wire operations including production, technology and engineering, and having an impact on operations in several countries. Also included is the intended realignment of stainless steel wire activities in Belgium.
- these changed market circumstances also drive a second line of action aiming at substantially improving the structure that supports Bekaert’s global presence and diversified product portfolio. By optimizing the efficiency and synergy potential within the organization, the Group targets substantial global cost savings.
Both plans are necessary to restore Bekaert’s long-term profitability. The Group also confirms its determination to remain a global market and technological leader in full support of its customers.
Bekaert has already taken actions to rightsize its sawing wire manufacturing footprint in China, following persistent low demand and very sharp price falls, driven by substantial overcapacity in the market. The implementation of these measures started in December 2011 and leads to a reduction of 1 250 jobs.
Bekaert management has today advised its Belgian works councils concerning the impact of the proposed measures on the activities in Belgium. This includes the intention to downsize certain activities in Aalter, Zwevegem, Deerlijk and Ingelmunster.
Moreover, in order to realign and optimize its organizational and cost structure on a global scale, the Group will start, without delay, a detailed study to identify measures to reduce its overall global cost structure by € 100 million annually in the forthcoming years.
Impact in Belgium of the intentions announced today
Difficult market conditions in the solar energy sector particularly affect the manufacturing plant in Aalter, which is largely engaged in sawing wire operations. This calls for structural measures to be taken under which management feels compelled to announce the intention to stop all sawing wire activities in Aalter. The production activities of bead wire and half products would be gradually integrated in other entities of the Group. It is the intention to keep the advanced cords end-products department in Aalter and search, together with the social partners, for sustainable solutions.
As a result of the global measures to rightsize the business footprint in sawing wire, Bekaert intends to adjust its resources and development priorities also in the technology center in Deerlijk and in the Engineering plant in Ingelmunster.
The competitive position of the stainless steel wire activities in Zwevegem has been under pressure since years. Consequently, Bekaert intends to limit the manufacturing activity of the Belgian stainless steel wire platform to products with high added value and to stainless fiber composite for Bekaert’s fiber technology plant in Zwevegem.
Approximately 600 jobs would be affected in Belgium. These plans and other initiatives to optimize the organizational and cost structure in general, aim at securing Bekaert’s competitiveness as a group and ensuring a necessary alignment of the Belgian operations with the changed business context.
Bert De Graeve, CEO, declared: “Unprecedented changes in market conditions of the solar business force immediate action. Our future lies in continuing to serve our customers worldwide with highly qualitative and innovative products and services. We are all determined, at Bekaert, to safeguard this basis for sustainable growth on a global scale. We do regret the personal consequences of this plan and, together with our social partners, we will do all we can to mitigate the social impact.”
Bekaert (www.bekaert.com) is a global technological and market leader in advanced solutions based on metal transformation and coatings, and the world's largest independent manufacturer of drawn steel wire products. Bekaert (Euronext Brussels: BEKB) is a global company with headquarters in Belgium, employing 28 000 people worldwide. Serving customers in 120 countries, Bekaert pursues sustainable profitable growth in all its activities and generated combined sales of € 4.5 billion in 2010.
Profile Bekaert in Belgium
The company was founded in 1880 in Zwevegem (Belgium) by Leo Leander Bekaert. Headquartered in Belgium, Bekaert today employs 2 700 people in its facilities in Zwevegem, Kortrijk, Brussels, Moen, Ingelmunster, Deerlijk, Aalter, Wetteren and Sprimont. The range of Belgian activities comprises manufacturing and sales, research and development, engineering, as well as corporate, business management, and functional services for the Group.
This press release may contain forward-looking statements regarding potential future savings or the potential future impact of the intended actions referred to herein or the potential development of future Bekaert products. Such forward-looking statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors. There can be no guarantee whatsoever as to any particular level of revenue or savings to be achieved by Bekaert as a result of such intended actions, nor as to any other future impact of such intended actions on Bekaert. Actual results may vary materially from those anticipated, believed, estimated or expected. Bekaert is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release in light of new information, future events or otherwise. Bekaert disclaims any liability for statements made or published by third parties and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other press release issued by Bekaert.