2011-11-01
Beginning next year, Ovako will decrease the production rate at its units in Sweden and Finland. The reason behind the decision is the macroeconomic uncertainty, which has curbed demand in several markets. The adjustment will be carried out within the framework of fixed-term employment contracts as well as the flexibility agreements between the company and the trade unions.
Until September, Ovako’s production in 2011 had remained at a stable and high level, but towards the end of the third quarter the Marketing and Sales organization began to observe a decline in order intake. In order to adapt production rates to this reduction, Ovako will, as of the turn of the year, decrease its production capacity by 15 percent compared to the first half of 2011. The measure will affect roughly 200 fixed-term employees at production units in Sweden and Finland.
“In the light of the real decline in order intake and the downturn in the economy, we are decreasing production levels and thereby reducing costs. I cannot comment on the distribution between the different business areas, because the union negotiations have not yet been concluded,” says CEO Tom Erixon.
“The downturn is most notably manifested in a decreased order intake from the automotive industry, but also to some extent from the general engineering industry,” he adds.
Ovako’s long-term investments in research and development as well as marketing and sales are proceeding according to plan.
For more information, please contact:
Viktoria Karsberg, Head of Communications, tel. +46 70 209 93 96
Ovako is a leading European producer of long special steel products for the heavy vehicle, automotive and engineering industries. Our production covers low-alloy steels and carbon steels in the form of bars, tubes, rings and pre-components. The company has 14 production units and several sales companies in Europe and the USA. Net sales in 2010 were EUR 861 million and the number of employees was 3,141. Total steel production capacity is 1.3 million tonnes per year.