Difficult global economic conditions have pushed graphite
electrode producer GrafTech International Ltd. to close
facilities and change strategy at others to remain profitable
and position itself for the future, the company said in its
third-quarter earnings release Oct. 31.
The Parma, Ohio-based
company, which produces graphite electrodes for use in
electric-arc furnace steelmaking, posted a net loss of $7.63
million in the three months ended Sept. 30 vs. net income of
$29.63 million in the same period a year ago on sales that
dipped 5.5 percent to $303 million.
industrial materials segment posted net sales of $233.3 million
in the quarter, a 10.3-percent decrease from $260.2 million in
the same period last year.
"We remain in a
difficult operating environment, particularly for our
Industrial Materials segment," GrafTech chief executive officer
Craig Shular said in a statement. "We have announced
initiatives ... designed to significantly improve our
competitiveness, allow us to better serve customers and
position our Industrial Materials business well when global
economies and steel demand recover."
The company will close
two of its highest-cost plants in Brazil and South Africa,
pending ongoing union and work force consultations, and a
machine shop in Russia. Reductions in corporate overhead,
coupled with reduction in capacity by 60,000 tonnes, should
help the company save $75 million annually, it said. The three
facilities employ about 600 people, or 20 percent of the
companys global work force.
In addition, GrafTech
said it has identified certain "debottlenecking opportunities"
and will initiate plans when key markets recover.
The U.S. steel market,
however, looks positive because of key end markets.
"Market conditions for our global steel customers continue
to be challenging; however, there are leading indicators that
point to an improvement in U.S. non-residential construction
and that the E.U. recession is in a bottoming process," Shular
said. "Some of our U.S. steel customers are cautiously
optimistic and are seeing improvement in their non-residential