Further Spanish cuts ahead

Further Spanish cuts ahead

The Spanish cement sector is facing more job cuts and possible further restructuring measures as local cement consumption continues to tumble.

Management of Cementos Lemona presented yesterday a job-cutting plan, which will affect 34 employees at the company's plant in the Basque country, according to trade union ELA.

Local newspaper Expansion reported that the  measure is part of the viability plan of cement group Portland Valderrivas, which controls Cementos Lemona. The group is trying to adjust its production to the decreased cement consumption in the current difficult moment for the construction sector in Spain. Employees at Cementos Lemona met yesterday to discuss the plan.

Meanwhile, Bloomberg reported that Holcim may plan a deeper restructuring of its business in Spain next year, according to Bloomberg reports.

“I think that we´ll begin a new restructuring because we keep losing money,” Daniel Garrido, a factory trade union delegate, told the news service.

Holcim’s plants are running at 50 per cent capacity in Spain, depending on the price of electricity, he said.

Holcim is in the midst of executing a plan to cut its Spanish staff from 1200 at the beginning of 2012 to 710 by the end of the year, company spokesman Peter Gysel said.

Holcim said in May that it would halt production at two of five cement plants, streamline its corporate structure and center administration in Madrid, in response to a 63 per cent decline in cement sales between 2007 and 2011.

Holcim has “no plans for further re-structuring for the time being, and if the current macro-economic situation remains stable,” Gysel said in an e-mailed response to questions.

Garrido, one of three worker representatives in Spain, sees reduced hourly salaries and further plant capacity cuts as measures Holcim could introduce from 2013.

Yesterday, Spanish cement association Oficemen reported a 34.3 per cent decline in Spanish consumption for the eight months to August 2012. The association earlier said it sees demand dropping by 25 per cent in 2012 to around 15Mt – 73 per cent less than the highs reached in 2007 (56Mt).