Building products manufacturer CSR will restructure its Viridian Glass business and cull approximately 100 jobs, due to ‘sharp deterioration in business confidence and activity’.
The company made the announcement as part of its first-half trading conditions update to shareholders.
CSR cites “the further deterioration in commercial construction (down 20%) and residential construction (down 15%) this financial period, together with the record appreciation in the Australian dollar,” for the cuts.
Viridian Glass is now expected to generate a loss before interest and tax of around $6 to $8 million for the six months to 30 September 2011.
Viridian Glass will restructure its float glass and bulk laminate manufacturing businesses – this process is expected to be completed over the remainder of this financial year.
The company will rationalise its laminating operations in Melbourne, by investing in a new laminating line at Dandenong and closing the current lines in Dandenong and Clayton.
It will also cease production of “uneconomical products at Dandenong and Ingleburn and alternatively source these products.”
According to a report from Thewest.com.au, this means 100 jobs will be lost.
CSR says the restructure will cost $22 million, which includes $12 million in capital and $10 million in other one-off restructuring costs – including redundancy payments.
The entire restructure should deliver around $10 million in savings to the company over the year.
CSR’s Aluminium business has also been affected by recent trading conditions, including the recent low $US aluminium price and the high Australian dollar, the company said.
CSR will release more news of the restructure and an estimate of its full-year earnings when it announces its half-year results in November 2011.