STOCKHOLM, Sweden, May 13, 2002 (PRIMEZONE) -- Sandvik Steel has decided to initiate negotiations with the trade unions regarding the closure of production of stainless spring wire at its subsidiary, Gusab Stainless AB in Mjolby, Sweden, with approximately 110 employees. The closure is expected to be completed during 2003 and is part of the previously announced program of change intended to increase efficiency and adapt production capacity within business area Sandvik Specialty Steels.
The background to the closure is the unsatisfactory profitability of the company's Wire division, which is, in part, due to total production capacity being too high. A review of operations has shown that the current five production units must be reduced to four to raise efficiency, reduce costs and increase profitability.
The Gusab brand will remain in the product range and production will be transferred to other wire manufacture units within Sandvik Steel. Given the current situation, about 20 of the employees at Gusab Stainless will be offered employment at these units. Other personnel will be offered support programs to be developed in cooperation with the trade unions.
"We have conducted a thorough review of all production units around the world and have come to the conclusion that this is the best long-term solution. The decision is in line with our efforts to raise the profit level and secure a sustainable, satisfactory return," says Peter Gossas, President of Sandvik Steel.
Sandviken, 13 May, 2002
AB Sandvik Steel
For further information contact, Jan Gunnarson, Division Manager and President of Gusab Stainless, Tel: +46 26 26 33 15
Sandvik is a high-technology engineering group with advanced products and world-leading positions in selected areas - tools for metalworking, machinery and tools for rock excavation, stainless steel, special alloys and resistance heating materials and process systems. The Group has 36,000 employees in 130 countries, with annual sales of approximately SEK 50 billion.
Sandvik Steel is a business sector within the Sandvik Specialty Steels business area and a world-leading manufacturer of highly refined products, tube, strip, wire and bar, in stainless steel and in special alloys. Annual sales are approximately SEK 10,000 M, with 7,000 employees.
Sandvik Steel subsidiary Gusab Stainless AB produces stainless spring wire and has 110 employees.
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