Jul 5 2006
Imerys has announced a reorganization of its UK kaolin business to ensure the future of its operations in the southwest of England.
Energy accounts for a significant portion of Imerys costs in the UK and with energy prices sharply surging over the past year, the competitiveness of the UK kaolin platform has been dramatically impaired.
In that context, Imerys will stop manufacturing paper coating grades in Cornwall by the end of 2007. The paper operations in Cornwall will focus on the production of paper filler kaolins, for which its natural kaolin reserves are best suited. Imerys' production capacity for coating grades in Brazil will be expanded accordingly.
At the same time, and for the same reasons, Imerys will close its hydrous kaolin operations in Devon and consolidate its UK kaolin for ceramics and for performance minerals base in Cornwall.
This UK reorganization includes a proposal of up to 800 job losses from the Cornwall and Devon area. Most of the changes will not take place before the fourth quarter of next year. In the meantime the company will start a full consultation process with unions and employee representatives. Plans will be implemented to support any staff made redundant with a comprehensive outplacement service, an employee assistance programme that will provide financial advice and counselling for all employees.
The purpose of this reorganization, along with a significant capital expenditure program (GBP 25 million), is to secure the future of the Group's UK operations. It will lead to a substantial accounting charge corresponding to asset write-offs mostly, and also social costs. An estimate of that global charge will be released upon publication of the estimated first-half 2006 results, scheduled for July 26.
http://www.imerys.com