Benzinga | Mar 29, 2021 04:20PM EDT

Ferroglobe Reports Engagement Of European Works Council On Proposals To Optimize Its Asset Footprint

Ferroglobe PLC (NASDAQ:GSM) (the "Company"), one of the world's leading producers of silicon metal, silicon-based alloys and manganese-based specialty alloys, announced today that it has engaged with the European Works Council ("EWC") to discuss details of proposals for an asset optimization program designed to safeguard its long-term future in Europe. Through this process, the Company is seeking to reduce or cease production at some of its sites in Europe.

Through a broader strategic turnaround plan, Ferroglobe seeks to enhance its financial position and overall competitiveness and ensuring the optimal asset footprint is a critical pillar driving this strategy. During the meeting, which marked the official start of the workers council consultation process with the EWC, Ferroglobe shared initial proposals about its strategic plan. This plan is focused on several areas for improvement, including:

* Adjusting our asset footprint to align production capacities and demand by focusing on the most technically advanced, operationally flexible and financially competitive sites;

* Focusing on the sites which support the broader commercial strategy and shift in product mix;

* Deploying resources at sites which provide significant opportunity to make further production cost improvements to ensure competitiveness through the cycle; and

* Trimming down costs with further efficiency and reduction in overhead.

The planned adjustment of production capacity is a further step to adjust our fixed cost structure and is a continuation of similar actions that have recently been taken in the United States and Norway to curtail or permanently stop production. While we are scaling back our overall production capacity, this effort ensures greater utilization at our remaining assets, which contributes to the improved production costs. The future asset footprint ensures sufficient capacity to serve expected demand levels, and meet our customer's specific needs.

Marco Levi, Ferroglobe's Chief Executive Officer commented, "The commencement of our discussion with the European Works Council comes after months of in-depth analysis and deliberation around the optimal asset footprint for Ferroglobe to provide profitability and competitiveness through the cycle. Potential adjustment to our production, subject to a social procedure with the EWC, supports our objective of bolstering our overall cost position and ability to service customers more competitively across Europe." Dr. Levi added, "In order to turn around Ferroglobe, we have to take some actions that are difficult, yet necessary. Our financial performance over the past few years highlights the need for change and the actions we are proposing are critical steps in turning around the Company, both operationally and financially. We are confident that the proposed actions will make our business stronger and secure a successful future for our platform in Europe."