As a direct consequence of persistently poor market conditions, Royal IHC, “is fine-tuning its strategy,” and letting go of 425 employees in The Netherlands.
“Responding to market demand, activities in The Netherlands will focus on creating added value for customers. Hence, IHC is increasingly outsourcing production activities in order to remain distinctive and cost-efficient in its marketing of ships, equipment and services, with product development and design, as well as sales and marketing remaining within the company,” the company said. “This adjustment in strategic direction will have an impact on around 425 employees in The Netherlands.”
Economic developments in the markets in which IHC operates continue to be extremely turbulent. As in 2015, the oil price and increasing international competition in particular have led to a significantly lower order intake in the first nine months of 2016 than anticipated, IHC said.
IHC has already announced that it expects to remain below the forecast sales budget for the whole of 2016. The associated low level of turnover makes it necessary to drastically cut costs, particularly in support positions within the organization. In addition, the company's 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 response to the economic situation and the need for cutbacks, the executive board is being reduced to two members: CEO Dave Vander Heyde and CFO Arie Vergunst.
IHC said it expects to emerge from this downsizing process as a smaller and healthier company that is once again able to flourish as a leading supplier of maritime equipment.
IHC will also invest in consolidating staff expertise and knowledge in order to maintain its leading position in the design, engineering, assembly and commissioning of vessels and equipment. Furthermore, international activities will be significantly expanded. In Brazil, IHC has now developed a solid base for itself in terms of market position and technological innovation.