Qualceram to cut 220 jobs at British plant

BATHROOM ceramics manufacturer Qualceram Shires is to axe 220 jobs at one of its British plants.

The Arklow-based company said yesterday that it had completed a review of its cost base and that the manufacturing plant at Longton, near Stoke, was in the firing line because full production there was no longer sustainable. Production will be shifted to a third-party supplier, while the plant will be wound down and left with less than 30 staff.

The company blamed a high fixed cost base and “relative inflexibility” at the plant and said it would conclude redundancy talks with unions and staff representatives before the end of the summer. More than 500 jobs at the company’s other plants in Britain and Ireland will not be affected.

Chief executive John O’Loughlin said the decision was necessary for the group’s long-term future. “Any redundancies from this essential restructuring are very regrettable. However, it is vital that the group is well-positioned to respond to fast-changing market conditions and increasing international competition,” he said.

The company’s British sales have come under sustained pressure from low-cost Asian imports. Mr O’Loughlin added the company needed to develop a low-cost operating model to compete and that Qualceram would continue its efforts to strip out costs in the future.

Stripping out production from Longton would “materially improve” the company’s supply chain management and would make it more flexible and able to respond quickly to changes in the market, the company said.

Qualceram reported pre-tax profits of €5.7 million last year, a 60% increase on 2003 but the improvement was largely driven by a €3.3m once-off gain on the sale of property. The restructuring programme announced yesterday will cost around €6m but would lead to savings of €2.5m each year.

The company’s share price fell 4% on the news yesterday.