Bodycote International, the supplier of heat treatment, metallurgical coatings, HIP and materials testing products and services is set to restructure its business after a year of reduced profits. Poor performance was attributed in part to a decline in the world economy. Prior to the decline in the economy (in the post June 2001 period), Bodycote were performing strongly, working on increased capacity.
The decline in the economy was not envisaged prior to the purchase of several businesses in addition to capital expenditure. Areas hardest hit include automotive, aerospace and telecommunications.
The need for restructuring follows on from a period where Bodycote had acquired several businesses over the last three years. Nearly US$255 million was spent on acquiring businesses in the US and Europe over this period. They have also outlaid a further US$300 million on capital expenses.
The restructure will involve consolidation of the acquired and existing businesses as well as some selective divestments. Bodycote's workforce numbering some 7400 will also be pared back to around 7100.
The outlook is good for Bodycote, with the restructure putting them in a strong position when the economy turns.