TRELLEBORG, Sweden—Trelleborg A.B.'s Offshore & Construction business is going through a major restructuring which will see a change of management as well as ceasing of some manufacturing capacity in the U.S.
In a Nov. 28 statement, Trelleborg said Fredrik Meuller, president of the Offshore & Construction unit, will leave his position at the end of 2017. However he will remain within the group during a transitional period to assist in the handover.
President and CEO Peter Nilsson will become acting business area president for Trelleborg Offshore & Construction.
Trelleborg added that it will be implementing many strategic measures to secure its competitiveness in the offshore oil and gas segment.
The condition of this market "has been challenging for a long time and still is," said the Swedish rubber goods manufacturer.
As part of the consolidation, the company will gradually discontinue the manufacturing of subsea buoys for drilling equipment in deep-water environments in Houston.
Production equipment will be transferred and consolidated to existing operations in Skelmersdale, England, whose manufacturing focuses on other types of deep-water buoys and engineered polymer systems.
Trelleborg said its U.S. sales and engineering organization will be retained.
Restructuring costs will be recognized as an expense in the fourth quarter of 2017 amounting to about $69.4 million, Trelleborg said.
The company expects to improve earnings for the effected operations by about $12 million per year under the prevailing market conditions.
According to Nilsson, the structural changes are expected to make the group's earnings potential and sales become "more stable and predictable."
The executive added that the changes would simplify the structure of the Offshore & Construction business unit.