Klöckner to reorganise French locations

Steel distribution group Klöckner & Co will be reorganising its sites in France this year, chief executive Guido Kerkhoff said at the group’s annual press conference in Düsseldorf on Thursday.

He emphasised that Klöckner will not reduce its range of activities in the country, but mainly rearrange locations to operate more effectively, which means closure of a number of sites. “We have a rather big footprint in France; our set-up there is very fractured, so we want to concentrate activities at the larger sites, while maintaining all processing services,” he said.

The company has 24 sites in France, of which 11 are projected to be closed. It has commenced negotiations with trade unions, and as of yet will not anticipate the possible outcome, chief financial officer Oliver Falk told Kallanish on the sidelines of the event.

He noted that smaller warehouses with annual sales of 10,000 tonnes or less tend to be hardly profitable due to their long turnover periods. “Material bought at high prices is just sitting for too long at smaller sites, which means tied-up capital,” he explained. Klöckner therefore wants to retain just the bigger houses with quicker turnover rates in the French regions where the company operates.

The “growth-oriented hub-structure initiative in France”, as it is called by the company, will mean a negative financial effect on earnings, which however it sees largely offset by medium-term gains from asset disposals, it says.

Christian Koehl Germany