10-18-2013

SGL Group: Closure of Lachute Plant in Canada

• Closure is part of the “SGL2015” cost savings program
• Operations will begin to wind down at the end of the year with expected completion within Q1/2014
• 110 employees impacted


Wiesbaden / Lachute (QE, Canada) October 18, 2013. SGL Group – The Carbon Company – announced today that it will close its Canadian graphite electrode facility located in Lachute, Quebec. This decision is a result of the company’s global realignment strategy and cost savings program “SGL2015”, whereby the objective is to sustainably enhance SGL Group’s competitive position and simultaneously improve its profitability.

The operations in Lachute will begin to wind down at the end of the year with expected completion within the first quarter of 2014. Approximately 110 employees will be impacted by the closure. The Lachute facility produces graphite electrodes, whose world market has been suffering from sluggish global demand for almost 5 years. The closure of the Lachute facility with a capacity of approximately 30 kmt graphite electrodes is the first part of a group-wide capacity reduction to sustain SGL’s cost leadership position. SGL Group is committed to ensuring that the high quality of its products and services will be maintained during this transition period.

With the cost savings program “SGL2015”, SGL Group responds to the difficult market conditions, characterized especially by unsatisfactory price developments in graphite electrodes, a cyclical downturn in its graphite specialties business as well as ongoing losses in the Business Area Carbon Fibers & Composites due to delays in the development and start-up phase. The package of measures comprises the global production network, the organizational structure as well as the Group’s portfolio and is targeted to achieve cost savings totaling approximately €150 million by the end of 2015, based on the actual costs for 2012. Of these total savings, €50 million will already be realized in 2013.

In connection with the program, there will be non-recurring expenses and extraordinary write-downs that will be recognized in accordance with IFRS in a timely manner, most of which should be accounted for with the 2013 annual financial results already.

In this context, SGL Group needs to write-down fixed assets in Lachute in the amount of approximately €25 million in the third quarter 2013. The results for the first nine months 2013 will be published on November 7, 2013.
 

About SGL Group – The Carbon Company

SGL Group is one of the world’s leading manufacturers of carbon-based products and materials. It has a comprehensive portfolio ranging from carbon and graphite products to carbon fibers and composites. SGL Group’s core competencies are its expertise in high-temperature technology as well as its applications and engineering know-how gained over many years. These competencies enable the Company to make full use of its broad material base. SGL Group’s carbon-based materials combine several unique properties such as very good electrical and thermal conductivity, heat and corrosion resistance as well as high mechanical strength combined with low weight. Due to industrialization in the growth regions of Asia and Latin America and increased substitution of traditional with innovative materials, there is a growing demand for SGL Group’s high-performance materials and products. Products from SGL Group are used predominantly in the steel, aluminum, automotive and chemical industries as well as in the semiconductor, solar and LED sectors and in lithium-ion batteries. Carbon-based materials and products are also being used increasingly in the wind power, aerospace and defense industries.

With 45 production sites in Europe, North America and Asia as well as a service network covering more than 100 countries, SGL Group is a company with a global presence. In 2012, the Company’s workforce of around 6,700 employees generated sales of €1,709 million. The Company’s head office is located in Wiesbaden.

Further information about SGL Group can be found online at: www.sglgroup.com.

Important note:

This press release may contain forward-looking statements based on the information currently available to us and on our current projections and assumptions. By nature, forward-looking statements involve known and unknown risks and uncertainties, as a consequence of which actual developments and results can deviate significantly from these forward-looking statements. Forward-looking statements are not to be understood as guarantees. Rather, future developments and results depend on a number of factors; they entail various risks and unanticipated circumstances and are based on assumptions which may prove to be inaccurate. These risks and uncertainties include, for example, unforeseeable changes in political, economic, legal, and business conditions, particularly relating to our main customer industries, such as electric steel production, to the competitive environment, to interest rate and exchange rate fluctuations, to technological developments, and to other risks and unanticipated circumstances. Other risks that in our opinion may arise include price developments, unexpected developments connected with acquisitions and subsidiaries, and unforeseen risks associated with ongoing cost savings programs. SGL Group does not intend or assume any responsibility to revise or otherwise update these forward-looking statements.

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