World's largest steel maker ArcelorMittal on Thursday said it will close a coke plant and six production lines in Liege facility in Belgium as demand weakens further in Europe.
The Lakshmi Mittal-led company, which had shut down the liquid phase steel production facility in the same plant in October, 2011, in a press release said, the move would affect 1,300 workmen.
"ArcelorMittal Liege today with regret informed the local works council of its intention to permanently close a number of additional assets due to a further weakening of European economy and the resultant low demand for its products," it said in the release.
At the time of closing the liquid phase steel production facility in October 2011, ArcelorMittal had proposed carrying on with downstream activities, operating five core lines and seven flexible lines in the Liege plant.
"Regrettably, since October 2011, the economic outlook has further deteriorated. Demand for steel in Europe dropped by a further 8-9% in 2012 and is now 29% below pre-crisis levels.
A number of key customers in the automotive sector have announced major restructuring projects at their plants. As a result, there is insufficient demand to support the running of these flexible facilities and no improvement is seen over the medium-term," it added.
The company said despite the closure of blast furnaces, the Liege facility reported an EBIT loss of more than Euro 200 million for the first nine months of 2012 and no improvement is foreseen in 2013 due to the continued weakness of European market.
"This is unsustainable on an on-going basis," it said, adding it thus proposed to close the hot strip mill, one cold rolling flows, two galvanisation and electrogalvanizing lines each.
"Additionally, the company is proposing that the coke plant, which is no longer viable due to the excess supply of coke in Europe, also be permanently closed," it said.
ArcelorMittal would continue to operate the five core lines which employ approximately 800 people at the Liege facility. These five lines are strategic due to their dedicated high quality products, specialised processes and technological innovation.
On the employees set to be affected with the proposal, it said," ArcelorMittal is committed to finding a socially acceptable solution for all those affected. This will include...the possibility of reallocation to other sites within the Group."