As part of the SGL2015 cost savings programme SGL is to close its graphite electrode plant in Wiesbaden, Quebec, Canada. These Lachute operations will begin to wind down at the end of the year with expected completion within Q1/2014. 110 employees will be impacted.
This decision is a result of the company’s global realignment strategy and cost savings program ‘SGL2015’, whereby the objective is to sustainably enhance SGL Group’s competitive position and simultaneously improve its profitability.
The Lachute facility produces graphite electrodes for electric arc furnaces but a downturn in the world market for steel has impacted demand for almost 5 years. The closure of the Lachute facility with a capacity of approximately 30kt of graphite electrodes is the first part of a group-wide capacity reduction to sustain SGL’s cost position. SGL Group is committed to ensuring that the high quality of its products and services will be maintained during this transition period.
With the cost savings programme the SGL Group is responding to the difficult market conditions, characterised especially by unsatisfactory prices for graphite electrodes, a cyclical downturn in its graphite specialties business as well as on-going losses in the Business Area Carbon Fibers & Composites due to delays in the development and start-up phase. The package of measures comprises the global production network, the organizational structure as well as the Group’s portfolio and is targeted to achieve cost savings totalling approximately €150M by the end of 2015, based on the actual costs for 2012. Of these total savings, €50M will already be achieved in 2013.
SGL is writing-down fixed assets in Lachute valued at approximately €25M in the third quarter 2013. SGL’s results for the first nine months 2013 will be published on November 7, 2013.
