Outokumpu Continues Job, Production Cuts

World's second-largest stainless steel maker said it will continue production cuts, temporarily lay off some 2,000 workers worldwide and cut 250 jobs.

HELSINKI (AP) -- Finland's Outokumpu Oyj, the world's second-largest stainless steel maker, reported Tuesday its losses swelled to euro233 million ($297 million) in the fourth quarter amid falling sales, mostly due to weak demand and production cuts.

In a separate statement the company also announced it will continue production cuts, temporarily lay off some 2,000 workers worldwide and cut 250 jobs. Those will come on top of 450 permanent job cuts in Sweden revealed in December.

Net loss in October through December was euro233 million, well beyond the euro16 million net loss in the year-earlier period, Outokumpu said. Revenue fell 34 percent to euro966 million.

The company said it expects stainless steel demand to remain poor in 2009.

"The deepening of the global financial crisis has a clear impact on stainless steel demand, and Outokumpu expects stainless markets to remain very weak in the first quarter of 2009," the company said.

The company's stock fell more than 2.7 percent in Helsinki to euro8.12 ($10.36).

Outokumpu said it will postpone planned investments of some euro1.5 billion by at least 12 months.

Last year, the group had said its fourth-quarter result would be hit because of poor stainless steel demand and warned of layoffs and cuts. It had also announced the planned closure in early 2009 of a stainless steel plant in Sheffield, England, because of over supply.

"The past weeks have shown that there is no marked improvement in stainless steel demand," Chief Executive Juha Rantanen said. "We regret that these cost-saving actions affect our employees heavily."

Based in Espoo near the Finnish capital, the metals group employs 8,500 workers worldwide -- up from 8,100 a year earlier.

Outokumpu became the world's second-largest stainless steel maker in 2000 when it merged steel operations with Britain's Avesta Sheffield to form AvestaPolarit. It has declared a goal of becoming the world's No.1, and has gradually divested noncore production.

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