German cement company Dyckerhoff said it has decided upon downsizing measures that will result in the loss of 100 jobs, with one-time plant closure costs amounting to approximately EUR30m. The company said its downsizing plan will help it upgrade the capacity utilization rate of its remaining plants and achieve cost and capex cash savings in the range of EUR10m a year on a permanent basis.
Dyckerhoff will discontinue the production of clinker for grey cement at the Amoeneburg plant in Wiesbaden as of December 31, 2005. Grinding operations for grey cement will be continued at a capacity of about 280,000t. The production of white cement in Amoeneburg will be maintained.
At the Neubeckum facility, clinker production will be discontinued entirely after having been downsized to part-time production in 2003. Cement grinding will be maintained until Dec. 31, 2006.
The large availability of blast furnace slag in Germany and the increasing cost pressure on energy intensive production make the use of blast furnace slag in cement production a necessity. The use of blast furnace slag and limestone as mineral additions in cement causes a decrease in the use of clinker and conversely an increase in the existing clinker overcapacities.
In cement production, plant utilization rate and clinker costs are critical to process efficiency. The capacity reductions, which will result in a loss of about 100 jobs at Dyckerhoff, are the inevitable consequence of an enduring overcapacity situation in the German cement market. One-time plant closure costs will amount to approximately EUR30m, of which EUR25m are due to non-cash extraordinary asset write-offs.