Thursday, November 9, 2017

Cargo Handling Manufacturer May Have to Cut Jobs As Low Oil Price Hits Investment

MacGregor Looking to Restructure
Shipping News Feature
FINLAND – MacGregor, part of Cargotec, has announced that it may have to reduce its work force by approximately 10% in an attempt to achieve annual cost savings of around €13 million, as the company aims to ensure long-term competitiveness on global markets and to continue the improvement of operational efficiency and customer centricity. The plans include the split of Smart Ocean Technology division into Cargo Handling division and Advanced Offshore Solutions division.

According to preliminary estimates, the planned efficiency improvement actions may lead to the reduction of approximately 190 employees globally. MacGregor employed globally 1,876 persons at the end of September 2017. The objective of the savings is to seek synergies in both the offshore and merchant shipping operations and adapt to the prevailing market situation faced by MacGregor.

MacGregor says that the market situation continues to be challenging. Merchant ship contracting improved slightly during January-September 2017 compared to the same period last year, but remained at a very low level. In the offshore industry, the low price of oil keeps investments at an unprecedentedly low level, which affects the demand for offshore load handling solutions. Contracting during January - September in the offshore sector declined compared to the comparison period in 2016. The demand for MacGregor's services declined during the third quarter especially in the offshore sector.

Cost savings are sought through the planned restructuring of operations and potentially with personnel reductions. It is estimated that the measures affect especially the operations in Norway, Germany, China and Singapore.

The planned savings measures are estimated to be reached in 2018. They are expected to result in restructuring costs of $7 million in the final quarter of 2017. Michel van Roozendaal, President of MacGregor, said:

"These planned measures are necessary to manage the continuing challenging market situation and to maintain our leading position in the maritime cargo flow, mooring and load handling markets. As a result of these difficult but necessary actions MacGregor will be able to continue to develop the company to be the leader in smart cargo and load handling. Consequently we are able to help our customers to develop their operations to be more efficient without compromising safety and eco-efficiency."