Finland-based stainless steel producer Outokumpu has announced that it has completed the strategic review of its thin and precision strip operations in Kloster and Nyby, Sweden and in Dahlerbrück, Germany, launched in June 2013 with the aim of reducing capacities and achieving cost savings through increased efficiencies. As a result of the review, Outokumpu plans to discontinue its operations in Kloster, Sweden, while it will continue the operations in Nyby, Sweden and in Dahlerbrück, Germany as before. The planned measures are expected to result in annual savings of approximately €15 million.
Outokumpu stated that the Kloster unit has been implementing a restructuring program since June 2011 to turn the unit back to profitability. Despite increased efficiencies, the unit continues to be loss making and therefore Outokumpu plans to close down the Kloster unit by the end of 2014. Outokumpu will honor its commitments to its Kloster customers during the transition period, whilst planning to move Kloster production to its other sites in Europe. Kloster had a production volume of approximately 18,000 mt of stainless steel in 2013.
"Continued high level of Asian imports into Europe, high pricing pressure and sluggish economic outlook in Europe mean that we need to take further actions to drive down our costs. The planned measures in our operations in Kloster are painful but necessary actions to improve Outokumpu's financial performance in this difficult market environment," said Outokumpu CEO Mika Seitovirta.