Weak market sees BE Group close Czech and Slovak operations

Sweden-based steel distributor BE Group has announced plans to close its loss-making operations in the Czech Republic and Slovakia. The move is designed to improve profitability and allow it to focus more intensively on its main markets in Sweden, Finland and the Baltics.

The company said the market in the Czech Republic and Slovakia has seen negative developments for a number of years, and BE’s companies there have continued to make losses “despite several measures taken to reach profitability.” Their turnover reached SEK 382 million (€41.3 million) in 2015 and operating losses were SEK 32 million.

“Against this background and the prevailing weak market outlook,” BE Group said it has decided to “close down the business in Slovakia and stop selling flat carbon steel and aluminum on the Czech market”. The profitable round bar business in Prerov, Czech Republic, is not affected by the closure decision. The one-time cost of the closures was put at SEK 45 million.

As a consequence of the closures, BE has announced organizational and management changes with effect from the second quarter of 2016. Its Swedish business unit will take over BE Poland and some other operations, and will be headed by group president and CEO Anders Martinsson.

Its “other units” business area will disappear with the Czech and Slovak closures. Its Finland unit will continue to include group operations in the Baltic countries and Lasse Levola will remain in charge.

The group’s top management team will be reduced from five to three, plus a new director who is currently being recruited “to strengthen the group’s strategic sourcing,” it said.

Henry Cooke, PLATTS