Trelleborg, Sweden – Trelleborg Offshore & Construction business is going through a major restructuring which will see a change of management as well as ceasing of some manufacturing capacity in the US.
The company announced 28 Nov that it was implementing a number of strategic measures to “secure its competitiveness” in the offshore oil & gas segment.
The condition of this market “has been challenging for a long time and still is,” said the Swedish rubber goods manufacturer.
As part of the consolidation, the company will “gradually discontinue” the manufacturing of subsea buoys for drilling equipment in deep-water environments in Houston, Texas.
Production equipment will be transferred and consolidated to existing operations in Skelmersdale, UK, whose manufacturing focuses on other types of deep-water buoys and engineered polymer systems.
Trelleborg said its US sales and engineering organisation will be retained.
As part of the changes, Offshore & Construction Business president Fredrik Meuller is to leave his position on 31 Dec. He will, though, remain within the group during a transitional period to assist in the handover.
Trelleborg president and CEO Peter Nilsson will become acting business area president for Trelleborg Offshore & Construction.
Restructuring costs will be recognised as an expense in the fourth quarter of 2017 amounting to about SEK580 million (58.5 million), Trelleborg said.
The company expects to improve earnings for the operations concerned by SEK100 million per year under the prevailing market conditions.
According to Nilsson, the structural changes are expected to make the group’s earnings potential and sales become “more stable and predictable.”
At the same time, the Trelleborg boss added that the changes would simplify the structure of the Offshore & Construction business unit.