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Breaking News -
Findland./August 30, 2003/ -- Metso Corporation's efficiency improvement program is proceeding in all businesses, and a part of the efficiency improvement measures are already at the implementation stage. The target is to streamline the long term cost structure and accelerate profitability improvement. The program aims at an annual result improvement of approximately EUR 100 million, of which Metso Paper will account for EUR 30-40 million, Metso Minerals for EUR 50-60 million and Metso Automation for EUR 10 million. In response to the changes in its business environment,
Metso is renewing its operating model. In Europe and North America
its operations will focus more clearly to maintenance and aftermarket
services, process improvements and machine rebuilds. At the same time,
operations will be strengthened on new, growing markets, such as China
and South America. It is estimated that in the next few years the
majority of the new pulp and paper making as well as minerals processing
capacity will be built in these areas. The measures also target increased
flexibility to respond to fluctuations in demand through reductions
of Metso's in-house manufacturing capacity and closer manufacturing
cooperation with external partners. Metso Paper
Metso Paper initiated negotiations
to reduce approximately 300 employees in the Nordic countries in the
beginning of June 2003. The negotiations have mostly been concluded,
resulting in the reduction of approximately 200 employees in Finland
through dismissals and other measures by June 2004. In Sweden, negotiations
resulted in a reduction of approximately 100 employees by June 2004.
These measures target an approximately EUR 11 million annual cost saving
with an estimated nonrecurring cost of EUR 6 million.
In addition, Metso Paper has initiated
an analysis of measures, such as outsourcing, to decrease its in-house
manufacturing capacity in Europe to correspond to the long term demand
outlook. Metso Paper estimates that it will need significantly less
in-house manufacturing capacity in Europe in the future due to fluctuations
in demand and changes in the focus of the customers' investment activity.
In North America the preparations
initiated by Metso Paper in June to reduce approximately 300 employees
from various parts of the organization are proceeding. The first decisions
on personnel reductions will be made by mid September.
Metso Minerals
At Metso Minerals, the measures targeting
a streamlined cost structure and improved operational efficiency will
mainly focus on crushing and screening and minerals processing businesses,
in which markets are suffering from over-capacity. The goal is to improve
the operational efficiency in the United States and Europe through reorganizing
production, closing down inefficient units and concentrating operations
into more cost-efficient units. First decisions concerning these plans
will be made by mid September.
The program also aims to streamline
the cost structure of the administration, as well as the sales and service
network, especially in North America and certain European countries.
Metso Automation
In addition to the personnel reductions
carried out in 2002, Metso Automation has decided to further streamline
its operations, initiating measures to reduce approximately 140 employees
in Finland, North America and its global sales network. The nonrecurring
cost of these reductions is estimated at EUR 5 million while the annual
savings generated will be approximately 10 million.
Metso Ventures
Metso Paper's foundries in Jyväskylä,
Finland, and Karlstadt, Sweden, and Metso Minerals' foundry in Tampere,
Finland, will be merged and operationally transferred to the Metso Ventures
business area as of October 1, 2003. Metso Ventures is a development
unit for businesses that serve the Corporation's other businesses. It
includes units under strategic development and potential future businesses.
The goal is to investigate future
development options for the foundries in Jyväskylä, Karlstad and Tampere.
The annual combined invoicing of these foundries is approximately EUR
70 million, of which approximately 60 percent derives from customers
outside Metso. The foundries employ approximately 600 people.
The expenses resulting
from the efficiency improvement program
The efficiency improvement program
is estimated to result in nonrecurring expenses of approximately EUR
80 million. They will be booked during the second half of 2003, and
therefore the Corporation's result will be significantly lower than
in 2002. In accordance with the interim review for January-June 2003,
due to the booking of these nonrecurring expenses Metso Corporation's
full year income before extraordinary items and taxes is estimated to
be negative.
Metso Corporation
is a global supplier of process industry machinery and systems, as well
as know-how and aftermarket services. The corporation's core businesses
are fiber and paper technology (Metso Paper), rock and mineral processing
(Metso Minerals) and automation and control technology (Metso Automation).
In 2002, the net sales of Metso Corporation were EUR 4.7 billion and
the personnel totaled approximately 28,500. Metso Corporation is listed
on the Helsinki and New York Stock Exchanges.
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