Royal IHC Announces More Job Cuts
As a result of persistently poor market conditions, Royal IHC says it is forced to fine-tune its strategy by further boosting knowledge-intensive activities. This change of course includes a reduction of 425 jobs.
From now on, the company will focus its activities in the Netherlands on creating added value. Hence, IHC is increasingly outsourcing production activities to remain distinctive and cost-efficient, with product development and design, as well as sales and marketing remaining within the company.
This adjustment in strategic direction will impact approximately 425 employees in the Netherlands. The management of IHC is talking about this with its Works Council and trade associations.
Oil Price and International Competition
IHC states the oil price and increasing international competition have led to a significantly lower order intake in the first nine months of 2016 than anticipated. IHC has already announced that it expects to remain below the forecast sales budget for the whole of 2016. Cost cuts will mostly impact support positions within the organisation.
Section-building to Be Outsourced
In addition, section-building activities will be further outsourced in order to respond to competition from Eastern Europe and Asia. IHC will maintain the shipbuilding slipway in Krimpen as its main slipway. The Kinderdijk slipway will be maintained as a reserve. In addition, the Executive Board is being reduced to two members: CEO Dave Vander Heyde and CFO Arie Vergunst.
Focus on Knowledge and International Activities
In the period ahead, IHC will be focusing on boosting its sales activities. In addition, IHC units that are currently thriving, such as Beavers, IQIP and Services, will be given space to maximise their potential for growth. IHC will also invest in consolidating staff expertise and knowledge to maintain its leading position in design, engineering, assembly and commissioning of vessels and equipment.
International activities will be significantly expanded. In Brazil, IHC has now developed a solid base in terms of market position and technological innovation. IHC hopes to profit from a growing preference for more “local for local” design and construction abroad.