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Ruukki to Initiate Project to Improve Competitiveness

02/02/2012 - Ruukki Metals plans to initiate a project aimed at operations across the division to achieve a permanent annual improvement of around EUR 50 million in earnings performance as well as business profitability at a production utilization rate of 80%.

Ruukki Metals plans to initiate a project aimed at operations across the division to achieve a permanent annual improvement of around EUR 50 million in earnings performance as well as business profitability at a production utilization rate of 80%.
 
The project will kick off with an analysis, among other things, to identify the potential to reduce variable and especially fixed costs, improve the efficiency of business models, increase flexibility in the cost structure, and improve the efficiency of support functions.
 
The analysis portion of the project is expected to be carried out and the targets set by the end of the first quarter, after which the company will decide on any further actions to be made. The full EUR 50 million earnings improvement being pursued is expected to be achieved during 2013.
 
The company notes that steel demand in Europe, its main market area, is forecast to grow moderately during the next few years, but to remain at a lower level than during the previous peak demand in 2007. Higher raw material prices and faster demand cycles in the steel market are other factors leading Ruukki Metals to look at ways to increase cost efficiency and business flexibility to respond especially to the changed business environment in standard steel products. The markets for special steel products—high-strength, wear-resistant, and coated steel products—have grown more than those for standard products in recent years, according to Ruukki Metals, a situation that it does not expect to change significantly in the near future.