High dollar leads CSR to cut 150 jobs - Sydney Morning Herald

Building products company CSR is cutting 150 jobs from its glass business, blaming the high Australian dollar and low construction activity.

CSR will close its glass manufacturing facility at Ingleburn, in Sydney's south west, in July. It will also merge a processing plant at Wetherill Park, in Sydney's south west, with a nearby plant in Erskine Park by January 2014.

The company also lowered its profit guidance for fiscal 2013, to between $30 million and $34 million, because of the weak performance of its Viridian glass business and the timing of property sales.

That’s down from expectations of net profit between $35 million and $54 million last November.

CSR shares initially plunged as much as 4.3 per cent in early trade but they quickly recovered and were recently up 1 cent, or 0.5 per cent, to $2.11.

"It is estimated that headcount reductions will be in the order of 150," the company said in a statement.

The high Australian dollar has forced down prices for the company's products, and made it cheaper to import materials, CSR said.

House construction activity is also at a low point and is expected to recover at a slower pace than previously expected, it said.

"CSR is implementing a major restructure of its Viridian glass operations to reflect the reality of the market, improve the short-term performance of the business and position Viridian to compete successfully in the future," CSR managing director Rob Sindel said.

The redundancies, site closure and relocation are expected to cost the company about $34 million, but deliver an annual boost of $27 million in earnings from 2015.

Australian Workers Union NSW secretary Russ Collison said he was not surprised by the job losses.

‘‘Viridian Glass has become a victim of the downturn in the building and construction industry,’’ Mr Collison said in a statement. ‘‘The plant is unviable due to the combination of the over-valued Australian dollar, the collapse in the domestic housing construction sector, and aging equipment that needed a major overhaul.

‘‘At the same time, cheap and often substandard overseas imports have put the bite on local manufacturers.

‘‘While we are not entirely surprised by the company’s decision, it’s a very bitter pill to swallow.’’

Mr Collison said the AWU would fight to ensure that Viridian employees ‘‘aren’t left out in the cold’’.

‘‘The onus is now on the company to make sure workers are treated with the respect they deserve in this difficult situation.’’

AAP