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Nippon Sheet Glass To Cut Workforce 10%

Post Time:Feb 03,2012Classify:Company NewsView:308

TOKYO (Nikkei)--Nippon Sheet Glass Co.

 

Japan's No. 2 glass maker aims to strengthen operations to address a sharp drop in demand for building and automotive glass products in Europe and other markets, along with a slowdown in solar cell applications.

 

Most of the steps will be taken in fiscal 2012, with related expenses coming to roughly 25 billion yen. The company expects the restructuring to slash costs by an annual 20 billion yen.

 

Nippon Sheet Glass said Thursday it will book a 3 billion yen restructuring charge in the year ending March 31. The company now expects to log a 3 billion yen group net loss for the year, instead of the 14 billion yen profit forecast previously. It posted a 12.4 billion yen profit in fiscal 2010.

 

Of its 36,000-strong group workforce, the cuts are expected to hit both management and staff. Specifics, such as reduction targets by region, have not been disclosed but peripheral operations in Japan and the U.K. are expected to be a focus. Nippon Sheet Glass will begin offering early retirement to some employees beginning in March.

 

The restructuring measures are necessary to address the global economic downturn, explained President and Chief Executive Officer Craig Naylor.

 

Production capacity will be reduced by halting one of its three U.K. float lines that specialize in construction glass by the end of March. Capital investment will also be curbed to within depreciation, which totals around 30 billion yen a year, through the year ending March 2014.

 

Nippon Sheet Glass' medium-term business plan had called for 140 billion yen in capital spending in emerging markets and elsewhere between fiscal 2011-2013. But at the end of last year, the company announced it would postpone construction of a glass line in Vietnam.

 

The company reduced its workforce by around 6,700, or 17%, in the year ended March 2010. The upcoming restructuring push will be its second since the acquisition of U.K.-based Pilkington Plc in 2006. Given Nippon Sheet Glass' strong presence in Europe, fallout from the region's debt crisis has taken a toll on operations.

Source: http://e.nikkei.comAuthor: shangyi

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