Swedish high-technology engineering and steelmaking group Sandvik has announced that it will adjust capacity and order backlog for steam generator tubing to reflect the current market conditions in the nuclear power industry. Accordingly, the order backlog will be written down by SEK 1.1 billion, negatively affecting the order intake in the second quarter by the corresponding amount.
The capacity adjustment of steam generator tubing will be implemented by phasing out the older installed steam generator tubing mill in Sandviken, Sweden, and concentrating all the production at the new steam generator tubing mill in Sandviken, which commenced commercial production in 2012. The older steam generator tubing mill will be mothballed, thus minimizing costs while creating the option to restart production if demand recovers. The capacity adjustment will take place during the second quarter of 2014, by the time all production of steam generator tubing will be transferred to the new mill. This capacity adjustment will affect around 110 full time employees in Sandviken.
Despite this capacity adjustment, Sandvik will still be able to fulfill its present contractual obligations to its customers.