HELSINKI, Jan. 30, 2014 (Press Release) - Ahlstrom, a global high performance fiber-based materials company, expands its rightsizing program from the previously communicated EUR 35 million to EUR 50 million. The majority of the planned actions related to the rightsizing program will be realized by the end of 2014, and the full impact of the program is expected to be visible in 2015.
As a result of the planned program, Ahlstrom's personnel is estimated to be reduced by approximately 400 people globally at the maximum, instead of the earlier estimated 350 people as communicated with the previous cost savings target on August 7, 2013.
"Improving our financial performance is our highest priority this year. The earlier announced program is proceeding as planned, but to deliver the targeted profitability improvement, we need to further reduce our costs now that the major transactions relating to our specialty paper and wipes businesses have been completed, " said Jan Lång, President & CEO.
"In addition to streamlining our costs, we are determined to improve our margins through driving new growth with our current businesses, supported by our enhanced product offering and increased share of new products in our sales mix," continued Lång.
The targeted savings will be derived from all business areas and functions globally. In particular, the aim is to reduce selling, general and administration (SGA) costs and further improve supply chain efficiency. The aim is to bring the SGA costs back to a level of 10-11% of net sales in 2015.
The planned changes and personnel impacts are subject to employee consultation processes, which will be initiated according to local legislation in the countries affected.
Ahlstrom plans to book non-recurring costs of approximately EUR 15 million related to rightsizing during the years 2014-2015. The company will continue to provide an update on the progress with the rightsizing program in its quarterly financial reporting.