In response to the difficult market situation for packaging steels, Corus Packaging Plus (“CPP”) has today announced the following:
As of July 2008, Corus intends to close CPP’s operation in Bergen, Norway. CPP Bergen has a production capacity of 150,000 tonnes and employs 260 people. A formal consultation process will begin immediately with the Bergen Trade Unions.
Before the end of 2008, Corus will furthermore propose to reduce capacity at CPP’s Trostre Works in South Wales in the UK by 150,000 tonnes. This may involve a reduction of 290 positions in operational and functional areas. Also in Trostre, a formal consultation process will begin immediately with the Trade Unions. This reduction is part of a programme to strive towards a sustainable position of its packaging steels operation in South Wales.
In addition, CPP has launched a significant performance improvement plan in the IJmuiden Works, focussed on quality, productivity and service.
Hugo Loudon, Managing Director, Corus Packaging Plus said: “It is after extensive consideration and with great sadness that we make this announcement today. CPP has an excellent record of continuous improvement and it is despite the best efforts of our employees that we must take these measures. However the European tinplate market continues to experience very difficult market conditions due to significant overcapacity. To ensure the longer-term viability of our packaging steels business, we must take action to improve our operating results.”
Hugo Loudon underlines that Corus will act according to its high social standards: “I will ensure that we do everything reasonably possible in both Bergen and Trostre to minimise the impact on employees affected. At the same time, it is our aim is to continue to be a quality packaging steels supplier. However, these measures in themselves are simply not enough to ensure the sustainability of our business. Therefore, in addition to the reduction in capacity proposed today, CPP will be seeking a minimum 30% price increase for the period January to March 2009, reflecting the significant increases in raw material costs. CPP is also considering moving towards annual contracts running from April-March to better align with raw material negotiations.'
Annanya Sarin, Corporate Relations,
Tel: +44 (0) 20 7717 4532
Roger Steens, Marketing Manager, CPP
Tel: +31 (0) 251 493005 (Packaging Press)
Arne Abrahamse, NorPR AS:
Tel: +47 (0) 55 59 92 00 Mob: +47(0) 95 13 92 20 (Norwegian media)
Rob Dangerfield, Corus Strip Products, UK:
Tel: +44 (0)1639 844043 (Welsh media)
Dick Schiethart, Corus Strip Products, IJmuiden:
Tel: +31 (0)251 492111 (Dutch media)
Corus Packaging Plus, headquartered in IJmuiden in the Netherlands, is one of the global market leaders in the manufacture of coated strip products and steel for packaging used in the food and beverage industries and other domestic and industrial applications. CPP focuses on innovative new materials, applications and processing technologies, working closely with its business partners to increase value through the supply chain. CPP supplies high quality light gauge steels to the packaging industry worldwide.
Corus is Europe's second largest steel producer with annual revenues of over £11 billion and a crude steel production of about 20 million tonnes. With main steelmaking operations primarily in the UK and the Netherlands, Corus provides innovative solutions to the construction, automotive, packaging, mechanical engineering and other markets worldwide. Corus is a subsidiary of Tata Steel, the world's sixth largest steel producer. With the recent acquisition of Corus, the combined enterprise has an aggregate crude steel production capacity of around 28 million tonnes with over 82,000 employees across four continents.