Restructuring Plan at Condat
Barcelona, Spain 27 March 2013 -- At an extraordinary meeting of employee representatives last Friday, the management of Condat, part of the Lecta Group, submitted to its Works Council a plan for reorganizing its industrial structure to restore its competitiveness and safeguard the future of its Lardin Saint Lazare site in Dordogne. This plan is a result of the accumulated losses of around 39 million Euros undergone by Condat over the last three years (2010 to 2012).
Condat and the Lecta Group are experiencing the effects of a structural crisis and ongoing deterioration of the economic situation, which has affected the demand for coated woodfree paper.
Like the rest of the European coated paper industry, Condat and the Lecta Group are operating in a difficult, mature market characterized by excess production capacity, a steep rise in the cost of raw materials not passed on to sale prices, the continuing growth of new media as a substitute for paper, and a major reduction in demand in Europe - of 25% - over the last five years.
Measures applied in 2007 to restore profitability temporarily improved Condat’s results, but unfortunately have proved to be insufficient for maintaining financial stability. The major losses undergone by Condat, which represents nearly 30% of Lecta’s turnover, are now forcing the Group to take further measures.
The plan should help to re-establish financial stability for Condat and for Lecta, vital for a better adaptation of its industrial facilities and its production in keeping with current market size and demand.
The measures include the closure of line 6, with a production capacity of 130,000 tons, and will entail restructuring all areas of the mill, cutting around 144 jobs.
The reduced production capacity will bring about a redistribution and prioritization of future output, which will be assigned to the company’s strategic markets, enabling it to maintain the current level of service for customers in these markets.
The plan also foresees withdrawal from the Progil complementary pension scheme, which represents an excessive financial burden for Condat given its economic situation.
Condat’s management will use all means possible to limit social impact and facilitate the return to the workforce of the employees affected. This includes overall support for the employees who, in addition to financial assistance, will be offered upgrading skills, training, as well as aid for business creation and for geographical mobility.
At management’s proposal, employee representatives have today notified their acceptance for setting up an Advice and Information Center and for establishing a system of voluntary redundancies.
An Advice and Information Center will have the goal of helping all interested employees, in order to assist them in their consideration and preparation for eventual reemployment.