Christian Salvesen opt for a leaner business approach

In Germany, a vigorous action plan, including the closure of four sites and a reduction in the workforce of approximately 200 people, or 25 per cent, is being negotiated by Salvesen with the Works Council.
The anticipated exceptional costs of this action plan in the current financial year would be in the region of 7 million pound, with a payback period of between one and two years. An action plan for Spain is in the process of being formulated, Salvesen said.
Ahead of an analyst site visit being held next Tuesday and Wednesday in France, British logistics provider Christian Salvesen PLC provided the following update on current trading and prospects:
At the time of the interim results on 4th December 2001, the Board stated that the core, underlying business remains strong and cash generative, with the Food and Consumer division proving highly resilient, the UK Industrial division’s margins holding up well despite profit growth being hit by difficult market conditions, and the Darfeuille acquisition in France performing well.
However, problems in Spain and in Germany continue to impact on the Group’s profit performance, and new management teams are addressing these problems.
Since that time, the Group’s operations have continued to trade in line with expectations, with the exception of the Industrial Division in the UK and Germany. In both of these markets, sharply lower volumes were experienced over the Christmas period, and these are not currently expected to fully recover to previously anticipated levels for the remainder of this financial year.
These trends reflect a worsening climate in the automotive and general engineering sectors, which currently represent significant markets for these operations.