EMEA News
Low Freight Rates Force Mass Job Cuts at Neste Shipping
Neste Shipping Oy (Neste Shipping), a subsidiary of Finland-based Neste Oil, says it will cut as many as 130 jobs, about 29 percent of its staff, as part of an effort to improve the company's efficiency in the face of low freight rates.
"Neste Shipping's financial position and profitability have been clearly below the levels we have expected for some time," said Managing Director Arvo Ruotsalainen.
"Freight rates have been low and costs have risen.
"We do not see any fundamental change for the better taking place over the next few years and it is impossible to achieve a sufficient level of improvement in our performance using the current operating model."
The company said it needs to improve its profitability to make "major statutory environmental investments" between 2014 and 2017 and to deal with rising costs and other projects and investments.
The company negotiations over the job cuts will cover all of its land- and sea-based employees in Finland, where it employs a total of 450 people.
Neste Shipping's goal is to increase revenue and reduce costs by about €15 million ($20 million) annually.
The company operates a fleet of 24 vessels carrying close to 30 million tonnes per year of oil and chemical products, mainly in the Baltic, North Sea, and North Atlantic, with about half its capacity devoted to Neste Oil cargoes.
Neste Shipping's sales totaled €332 billion ($448 billion) in 2011, and it has net assets of €249 billion ($336 billion) according to the Neste Oil website.
