SIG slashes 250 jobs in restructuring move
The Swiss industrial concern, SIG, has announced it will sell three units, with the loss of 250 jobs worldwide.
The company said the sale was part of an ongoing drive to focus on the drinks industry, adding that it expected to make a loss this year.
SIG said in a statement on Friday that it would divest itself of SIG Simonazzi, SIG Alfa and SIG Manzini/Comaco – all part of its beverages division.
The company added that it was currently in sales negotiations with Sweden’s Tetra Laval Group about the units.
It also said that around 250 jobs would be cut, including some at its headquarters in Neuhausen, in canton Schaffhausen. Although the group is mostly counting on natural attrition, SIG said that it had not ruled out making some redundancies.
Analysts at Zurich Cantonal Bank said they welcomed the company’s decision to break away from less profitable business units.
Loss
The company warned, however, that the sale of the units would lead to a “significant” full-year operating and net loss.
But it added that it expected a strong future performance from its core drinks packaging division, SIG Combibloc.
SIG has been gradually ridding itself of its non-core businesses to focus on the drinks sector.
The company, which used to produce firearms and railway carriages, has been re-positioning itself as a supplier of packaging materials and services for the growing beverage industry.
German market
SIG had a more positive outlook for its Combibloc division this year, forecasting an operating margin of 11 to 12 per cent.
The company also expects the division’s sales to grow in the two-digit percentage range, except in the key German market.
SIG said that sales in Germany have been unsatisfactory this year due to a hesitant consumer market, cool summer weather and uncertainties generated by the introduction of mandatory bottle deposits.
It added that the margin on earnings before interest, taxes and amortization was expected to be at least 12 per cent next year.
The stock market welcomed the SIG decision in early trading. Shares were up nearly ten per cent shortly after the market opened.
swissinfo with agencies
SIG figures:
9,000 employees around the world at the end of 2003.
7,000 at the end of June.
Net sales in 2003: €1.896 billion (SFr2.88 billion).
Loss: €20 million.
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