August 28, 2008

Corus plans to cuts tinplate capacity in EU by 20%

It is reported that Corus Packaging Plus has embarked on a plan to cut its European tinplate capacity from 1.5 million tonne per year to 1.2 million tonne per year.

Corus said that the re structuring plan, announced to union representatives on April 18th, involves the closure of the 150,000 tonne per year Bergen plan in Norway and a similar capacity reduction at the Trostre plant in the UK. The plan is expected to involve over 500 job losses.

Commenting on the planned cuts at Trostre in South Wales, Mr Hugo Loudon MD of Corus Packaging Plus said that “It is after extensive consideration and with great sadness that we make this announcement. Corus Packaging Plus has an excellent record of continuous improvement and it is despite the best efforts of our employees that we must take these measures. 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.”

According to analysts, last week the works council at Corus Packaging Plus’s third European plant at Ijmuiden in Netherlands called on the company to increase its investment in the packaging steels business. Although the plant has not been directly affected by the cuts, it does supply hot rolled coil to Bergen. Supply shortages and high prices of this feedstock are part of the reason for the tinplate cuts.

The Bergen plant is due to close by July, while the cutbacks at Trostre are the subject of a 90 day consultation process which has just commenced.

(Sourced from www.itri.co.uk)