Trelleborg to simplify oil & gas business amid challenging market environment
Swedish engineering company Trelleborg has decided to simplify its offshore oil and gas operations amid challenging market environment.
As part of this plan, Trelleborg said on Tuesday it had decided to gradually discontinue the manufacturing of subsea buoys for drilling equipment in deep-water environments in Houston, Texas.
Subsequently, the production equipment from Houston will be transferred and consolidated to existing operations in Skelmersdale, England. The U.S. sales and engineering organization will be retained.
The company added that restructuring costs related to the Trelleborg Offshore & Construction business area would be recognized as an expense in the fourth quarter of 2017 amounting to about SEK 580 million ($69.6M), but the changes are expected to improve earnings by approximately SEK 100 million ($12M) per year under the prevailing market conditions.
At the same time, Trelleborg expects the adapted structure to contribute toward further earnings improvements when the market recovers.
Peter Nilsson, president and CEO of Trelleborg, said: “The planned structural changes will make the Group’s earnings potential and organic sales trend more stable and predictable.
“At the same time, the business area’s structure will be simplified, ensuring that Trelleborg will remain the only truly global supplier of both deep-water buoys and other engineered polymer solutions in the offshore oil & gas segment.”
Meuller steps down
Another change in the Trelleborg Offshore & Construction business area is the departure of Fredrik Meuller, Business Area President at Trelleborg.
The company and Meuller mutually agreed that he would step down from his position on December 31, 2017. However, he will remain within the Group during a transitional period to assist in the handover to CEO Peter Nilsson who will also become acting Business Area President for Trelleborg Offshore & Construction.
Commenting on Meuller’s departure, Nilsson said: “He has served as Business Area President for Trelleborg Offshore & Construction during the past five years and was a driving force in the globalization of the business area and the development of the offerings to our customers. Recently, the business area has faced challenging market conditions, which Fredrik has handled in an exemplary manner.”
Meuller added: “After five years as Business Area President, and another ten years in various positions at Trelleborg, I have decided to leave Trelleborg. I am convinced that the measures being taken within Trelleborg Offshore & Construction will strengthen the business area’s positions and that the operations will benefit greatly from these when the markets eventually recover.
“At the same time, I see the need to simplify the organizational structure and have therefore decided to move on to new challenges outside of the Trelleborg Group.”
Offshore Energy Today Staff