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Forterra take steps to mitigate decline in demand

Forterra's Swadlincote facility

Company provides operational update and further details on measures being taken to mitigate impact of COVID-19

IN a trading update issued earlier this week, Forterra plc say that while daily despatches of brick and block products have now recovered to around 50% of corresponding 2019 levels, group revenue declined by 39% for the five months to 31 May 2020, compared with the corresponding period in 2019, with a year-on-year decline of 86% in April and 62% in May.

Although the company is currently manufacturing at 12 of its 18 facilities, with production expected to start at most of the remaining facilities by the end of July, economic and industry forecasts indicate a prolonged impact from COVID-19 on the UK construction sector.

Forterra are, therefore, taking steps to restructure the Group’s operations in line with an anticipated decline in medium-term demand, including proposed changes to shift patterns and adjustments to the size and structure of support functions.

The company is also proposing to consolidate the manufacture of all precast concrete flooring products at its Hoveringham facility, in Nottinghamshire, which will necessitate the mothballing of its hollowcore flooring facility at Swadlincote, in Derbyshire.

Forterra say these proposals will not affect their ability to service key customers or their specialist precast concrete facility at Swadlincote, but will, if implemented, lead to the loss of approximately 225 jobs, primarily from their concrete products facilities.

Stephen Harrison, chief executive of Forterra, said: ‘Since the beginning of the COVID-19 pandemic we have continually reviewed demand and inventory levels to enable us to adapt our business to meet the changing market requirements.

‘We have now announced measures that we are proposing to take to mitigate the impact on our business…and are consulting with employees to restructure some of our operations in line with the anticipated medium-term decline in demand.’

Mr Harrison added: ‘I would like to stress that these changes will not affect our ability to service customer requirements and that we are not permanently removing any production capacity.

‘This is clearly a challenging period for many businesses and their employees, which is why we are acting now to make sure Forterra remain in a strong position to continue serving the needs of our customers and the wider industry and, of course, to remain an important employer for the communities in which we operate.’

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