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UK: Glass firm lays off 60 staff to cope with delays

Post Time:Feb 16,2009Classify:Company NewsView:280

Specialist glass manufacturer Romag has temporarily laid off 60 workers at its County Durham plant, as the company tries to cope with delays to several of its contracts.

Romag, based in Leadgate near Consett, yesterday said it expected to see an increase in first half profits, but admitted it had been necessary to send a quarter of its 240-strong workforce home for a period with customers putting off schemes for various reasons.

Chief executive Lyn Miles said she was hoping to have the 60 employees back on board shortly, after sending them home for a month initially, but admitted the company was finding it difficult to forecast how trade would be for the rest of 2009.

The City did not take kindly to Romag’s annual general meeting update, despite the indication of profit growth, with shares ending the day down 11% at 40p. Last year Romag posted an impressive 93% rise in sales to £33.6m, with full year profits of £3.7m, and has been very positive about the worldwide prospects for its Powerglaz glass, which generates electricity from the sun’s rays, while acknowledging how challenging 2009 would be.

Ms Miles said she remained upbeat about Romag’s prospects, given the increasing demand for renewable energy.

Though the company said yesterday it expected first half profits to be ahead of last year, Romag also said margins would be lower than in the same period of 2008.

Ms Miles said: “The fall in margin is purely down to the fact that because of the economic situation, certain projects we would have anticipated starting have been delayed.

“That has happened for various reasons - some for the weather, or because banks are hesitating in funding - it’s all beyond our control. But these projects are delayed – not cancelled. We have not lost any customers.”

Romag is now three weeks into an initial month long period of temporary lay offs for between 60 and 70 workers, and Ms Miles said: “We would envisage these lay offs to be very, very temporary. We would hope to bring them back really quite soon.”

The state of the global economy appears to be at the heart of Romag’s concerns at the moment, with the company performing well but its customers becoming more cautious.

Ms Miles added: ”This volatility is unprecedented, but we are not down hearted about the future. We will still be looking for opportunities. In an economic downturn, there are always opportunities we can seize upon.”

Romag is optimistic about the UK government signing up for a new scheme which would see anyone producing renewable energy being able to sell it to the National Grid at a premium to the normal price.

Ms Miles said similar arrangements work in mainland Europe and she had indications that it could come to the UK in spring next year.

She said: “The UK market certainly should be stimulated with the potential for the ‘Feed In Tariff’. The Government has been hesitant about it -– though we think they now realise they will have to do it.

“It will really stimulate the renewable industry in the UK, and we will be well placed to take advantage.”

Source: nebusiness.co.ukAuthor: shangyi

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