BICC to axe Welsh jobs as cable demand slumps
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Your support makes all the difference.BICC, the cables and construction group, is considering cutting jobs at one of its factories in Deeside, North Wales, in an effort to offset a slump in one of its main markets, the company disclosed yesterday.
The Welsh plant employs around 500 people to produce fibre-optics used in telecommunications cables. Prices of these products have lost more than 25 per cent over the past year owing to overcapacity and reduced demand from telecommunications companies.
Alan Jones, BICC chief executive, said the group had been hard hit by the price fall and was looking at ways of increasing efficiency and reducing costs in the division. He said the main priority was to increase productivity, but added: "If I can get the efficiency up, then I can manage with less people." A team was working on the cost-cutting plan at the moment.
Mr Jones said BICC would not take a "slash 'n burn" route, insisting that any job losses would be minimal. However, his comments come just a day after the industrial gas-maker BOC said it was to cut 5,000 jobs worldwide, including 500 in the UK.
News of the potential job cuts came after BICC reported a pounds 9m fall in interim pre-tax profit to pounds 49m on turnover down to pounds 1.9bn from pounds 2.0bn last year. The shares closed unchanged at 111.5p
The company blamed the poor results on a profits dive by its European cables business, which had been triggered by the price slump in fibre- optics. BICC said that in the short-term the tough trading conditions for its European cable operations were likely to continue, with oversupply and subdued demand expected to dent profits further.
Weak Asian markets and a delay by the UK competition authorities in approving an asset swap with rival Delta dampened profits further.
The Balfour Beatty construction and engineering division proved the bright spot, reporting a near doubling of profits to pounds 30m. Mr Jones said the division had benefited from a number of railway contracts, including a pounds 100m deal for the remodelling of Euston Station. The company was well placed to win further contracts on the West Coast Main Line.
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