RHI AG, the world’s biggest fire- proofing ceramics maker, plans to cut 1,000 jobs after the business performed in line with its “worst-case scenario.”
RHI will fire about 13 percent of its 7,766 workers, the Vienna-based company said today in an e-mail. Sales have fallen 25 to 50 percent at divisions that sell ceramics for steel, cement and glass production, it said.
“In the last few weeks, the worst-case scenarios we have been preparing for since the beginning of the year have become reality,” Chief Executive Officer Thomas Fahnemann said. “The insufficient order situation has a negative effect on the steel and industrial divisions and makes capacity adjustments necessary.”
Steelmakers in Asia and Europe are slashing production and cutting jobs as the global economic slowdown curbs demand. Prices of hot-rolled coil, an industry benchmark, have more than halved since June to $505 a metric ton, according to U.K. industry publication Metal Bulletin. RHI, which makes ceramic liners that can withstand temperatures up to 1,800 degrees, announced in March it would cut annual costs by 80 million euros ($106.2 million) after 2008 net income fell 9 percent.
Three quarters of the jobs will be cut in production and the rest in administration, accounting for about half the total cost cutting.
RHI rose 11 cents, or 0.9 percent, to 11.80 euros in Vienna. The company lost 54 percent of its market value in the last year.
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Almost 60 percent of the job cuts will be in Europe, with a quarter coming from Austria. RHI, which also has operations in Africa, Asia and South America, posted 2008 net income of 100.6 million euros, missing analyst estimates of 133 million euros. The company plans to report first-quarter results on May 5.
The company has started a review of its 30 factories and expects results in the “coming months,” Fahnemann, 48, said in a telephone interview from Vienna. This may include closing down plants, he said.
“We are looking to grow in Asia, particularly in China and India, and South America, especially in Brazil, through both greenfield operations and possibly acquisitions” Fahnemann said. While the company is looking for possible takeover targets, nothing is imminent, he said.
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