Finnish stainless steelmaker Outokumpu has rescinded its initial plan of divesting from its long steel production division and has instead opted to make some operational changes to increase its profitability.
The manufacturer indicated in a release on Sep 29 that it initially began a review of its longs product division in February 2020 and reached an accelerated decision in July, after appointing Liam Bates as the company’s new president.
Under the new turnaround program outlined by Outokumpu, the steelmaker will layoff approximately 100 employees. The company will also diversify its product mix and focus on specialty grades, which yield higher margins. The company noted that it will implement better operational practices to increase efficiency at its plants in the UK, the US, and Sweden.
The division posted an EBITDA loss of €5mn ($5.8mn) in H1 2020, compared with a €7mn loss it made in FY2019. The lower losses made it necessary to implement the restructuring rather than divest to correct the trajectory of operating profits, the company said.
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