Swedish engineering steel specialist Ovako tells Kallanish that it is going to broaden the company restructuring process begun in November 2015.

The annual cost saving for the entire program is now increased from €45 million ($50.1m) to €50m, with full effect in 2018. The planned reduction of employee numbers is also being increased from 250 to 300, the steelmaker says.

The program will be implemented over two years, with full effect from 2018. For full-year 2016 the savings are estimated to €20 million. Work continues to evaluate whether further cost savings can be achieved within the restructuring program, Ovako adds. Previously announced restructuring costs and capital expenditures for the program are estimated to remain unchanged.

Several initiatives from the initial restructuring scheme are progressing according to plan. These include closure of the Forsbacka production and distribution unit, to be finalised during 2016, and the closure of the distribution centre in Turenki (see Kallanish 28 October).

A major change from the initial plan is that the Hällefors rolling mill will remain in operation, the company confirms. This comes as a consequence of the planned increases in productivity in all Ovako’s sites. Company focus will be on implementing cost savings “… rather than the previously announced, and more time-consuming and complex, process of closing the Hällefors rolling mill,” it adds.