22 Oktober 2003

OLEON starts cost reduction and restructuring programme: BREAKTHROUGH 2004

OLEON announces under the name “Breakthrough 2004″ a number of measures which should lead to a prompt improvement of the company results and form the basis for its future development.

The market situation in which OLEON operates, has deteriorated under pressure of the overall economic downturn. The fatty acids market has become extremely competitive and has to cope with an increasing international competition. On top of this the glycerine prices have reached historic low values. These facts made it necessary to take urgent measures.

Several working groups were formed to identify significant cost reductions at all levels. The restructuring of the sales organization and the centralization of the international sales office at the OLEON headquarters in Ertvelde are being prepared.

In order to improve the cost structure of both the OLEON headquarters and the production site in Ertvelde, OLEON needs to work towards efficiency improvement and cost savings including the reduction of the personnel cost. Restructuring of the organization of this site would lead to a gradual reduction of the number of persons employed in Ertvelde with 32 persons (inclusive the relocated sales office). The management has informed the works council of this plan and communicated their willingness to the representatives of the personnel to work out a social plan. The management will also make sure that a climate of dialogue is maintained.

Considering the improvement of the ester sales forecast and the start-up of the new production plant later this year, an increase of the production volume at our Oelegem site is expected. The optimal use of all available means of production is top priority at this site.

The cost structure of the Sandefjord site (Norway) is not in line with the current sales results and with the turnover expectation. Also at this plant working groups prepare proposals for substantial improvement of these results.

Source: www.oleoline.com vom 2003-10-20.

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