OSLO (Reuters) - Norsk Hydro <NHY.OL>, one of the world's largest aluminium producers, said on Tuesday it would close some production in Germany and could lay off more than 700 workers in a bid to increase profitability at its rolled products business.
The restructuring, expected to cost around 160 million euros ($177 million), includes closing parts of foil production at the Grevenbroich plant in Germany, as well as cost-saving measures across the group, the company said in a statement.
Out of the total cost, 100 million to 120 million euros will be taken as a provision in the third quarter 2019, it added.
"Our cost position in parts of our foil business is too high, mainly due to manning intensive and manual production processes, and we are also facing strong competition in this market segment," said Einar Glomnes, executive vice president of rolled products.
"As a consequence, we are planning to close our foil mainline."
The company said the total restructuring consisted of a planned cut in personnel costs of up to 60 million euros per year.
"This will lead to a redundancy of up to 735 full time equivalents (FTEs)," the company said in a statement.
While one FTE denotes one employee working full-time, the actual number of employees affected could be smaller, a spokesman for the company told Reuters.
"The goal is to have as few people affected as possible, and this could be done by reducing working hours or other measures," he added.
The company said it wanted its rolled products business to focus more on growth industries, such as the automotive sector.
(Reporting by Nerijus Adomaitis; Editing by Lisa Shumaker and Emelia Sithole-Matarise)