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Royal IHC to make cuts

By: Lewis Holdsworth 15/06/2015 Royal IHC

General

As a direct result of the rapidly deteriorating market, maritime equipment supplier Royal IHC has decided to accelerate the implementation of its ‘IHC 2020’ strategy, which was announced in 2014.

This strategy aims to reduce IHC’s dependence on the volatile shipbuilding industry. Furthermore IHC will focus on the design and production of technologically complex, integrated dredging and offshore vessels, and aims to extend its equipment offering, and to further develop its OPEX activities, such as service and rental activities.

Economic developments in the markets in which IHC operates at present are extremely challenging. A decline in oil prices, the intensifying and internationalised competition, and the customer’s changing selection dynamics, are forcing IHC to take action. This means that IHC will have to realise substantial cost reductions and increase its competitiveness to ensure a stable and economically sound business in the future.

The implementation of the strategy set out for 2020 will be accelerated. The number of slipways in The Netherlands will be reduced from four to two and the acquisition of additional foreign building capacity will be realised sooner than planned.

These measures also affect the number of jobs. IHC intends to terminate the employment of 487 of its employees. Simultaneously, a large percentage of the flexible workforce (a total of 1,127 employees), will be phased out. The aim is to achieve the targeted reduction by the end of 2015. This is all subject to the achievement of agreement with relevant parties, such as trade unions.

On Wednesday 10 June staff meetings were held at all locations in which the board gave further explanation and details to all employees. Works council and trade unions have also been informed of this intention. IHC is working to draw up a social plan, which it will present to the trade unions in the upcoming weeks.

IHC is confident that with the proposed measures it will maintain and be able to expand its position as a leading supplier of maritime tools. Despite an element of uncertainty, the future also offers an increasing number of opportunities, which IHC aims to take advantage of from a strong competitive position.

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Royal IHC to make cuts

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