March 28, 2019 / 8:36 AM / 8 months ago

UPDATE 1-Bekaert to restructure Belgian activities, cuts over 200 jobs

(Adds details, share price reaction, analyst comment)

March 28 (Reuters) - Belgian steel wire producer NV Bekaert said on Thursday it intended to close its steel fibre plant in Belgium, cutting 281 jobs as part of a restructuring plan aimed at raising competitiveness in a tough steel fibre market.

“Dramix plant in Moen, Belgium, does not have the ability to remain competitive with the current pricing trends in EMEA,” the company, which employs about 1,900 people in Belgium, said in statement.

Dramix is Bekaert’s fibre concrete reinforcement series consisting of three different fibre types.

The company added that the market for steel fibres for concrete reinforcement had become “much tougher” as its competitors moved their manufacturing activities to lower cost locations in Central Europe and sourced their fibres from low cost countries.

The Belgian restructuring also involves moving some activities to lower cost locations such as the Czech Republic, where the company plans to boost its production capacity, and Slovakia, where it is to move its spare parts activities,

It will also mean downsizing of administrative roles, Bekaert said.

At the beginning of March, the company announced weaker 2018 results as sawing wire sales slowed down significantly and the industrial steel wire markets declined.

It also provided a cautious outlook deemed “uninspiring” by analyst.

“Bekaert has not provided financial guidance, but we understand these actions fit within its ambition to rebuild REBIT (recurring earnings before interest and tax) margins,” ING analysts said in a note.

Shares in the company were virtually flat at 0814 GMT.

Reporting by Piotr Lipinski in Gdynia; editing by Emelia Sithole-Matarise

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