Cemex to cut down staff strength in acquired RMC |
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Wed, 22 Jun 2005 18:35
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LONDON: Mexican cement maker Cemex de CV, which has acquired British RMC, announced that it will reduce its U.K. head count by 750 in order to cut costs. The downsizing will mean job losses for nearly a tenth of RMC's total workforce.
The company said in a statement in New York that the British staff would be consulted about the reductions. It also did not rule out quarry closures.
Cemex, the world's third largest cement company behind France's Lafarge and Switzerland's Holcim, said it is also considering sale of RMC's losing Rugby cement unit and some other non-British businesses. RMC has already cut some 5,000 staff in the last few years in the face of problems arising out of construction slow down, mainly in Germany.
Cemex said it intends to reduce its total workforce by 2,000 and achieve savings through this and other cost-cutting measures to the extent of pounds 110 million annually by 2007.
Cemex's acquisition of the troubled RMC for 2.3 billion pounds, including 800 million pounds in debt, marked the largest ever by a Mexican corporate.
RMC had been hit badly by problems in its German unit and at its Rugby plant. It also paid heavy fines in Brussels for operating a cartel along with other European building materials suppliers.
Cemex has grown through acquisitions in the last 10 years, which included the $2.8 billion buy-out of U.S. cement maker Southdown in 2000.
The company's latest financial forecast indicated a 53 per cent increase in earnings before interest, taxes, depreciation and amortization for the second quarter. It expects the EBITDA to increase to $970 million for the quarter, with operating income rising 56 per cent from a year ago to $730 million.
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