CSR has cut 150 jobs following a restructure of Viridian glass operations in Sydney partly due to cheaper imports becoming preferential in the marketplace.

The Australian Worker's Union (AWU) NSW State Secretary Russ Collison, expressed fears that the inevitable increase of imports could see substandard glass filtering into the Australian market.

“The plant is unviable due to the combination of over-valued Australian dollar, the collapse in the domestic housing construction sector, and aging equipment that needed a major overhaul," said Collison.

“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.”

CSR conducted a review of Viridian and concluded that in the past few years a sustained structural shift has occurred in the market for architectural glass products including:

  • A persistently high Australian dollar that has put downward pressure on pricing, and has enabled alternative import supply chains to be established which are now expected to become a permanent feature of the glass market in the future;
  • Weaker residential and commercial construction markets are both at cyclical lows and are forecast to recover at a slower rate than previously anticipated;
  • A significant increase in (downstream) processing glass capacity during a period of weak demand has adversely impacted the profitability and profit potential of the industry; and increasing energy and manufacturing costs in Australia have exacerbated Viridian’s competitive position relative to imports.

CSR Managing Director Rob Sindel 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,”

The float and laminating glass manufacturing facility at Ingleburn in New South Wales will be closed in July 2013 with the majority of volume previously supplied from Ingleburn to be supplied by Viridian’s Dandenong facility in Victoria and supplemented by imported supply from partners.

The glass processing facility at Wetherill Park in New South Wales will be consolidated into the nearby Erskine Park facility by January 2014.

Viridian’s overhead costs will be reduced to reflect the smaller operating footprint.

CSR estimates the costs of redundancies, site relocation and site remediation costs will be approximately $34 million. Due to the extended time required to implement the restructuring program, it is expected that the full benefit of these initiatives will not be realised until the financial year ending 31 March 2015. CSR has announced that it will be working with affected employees to provide redeployment opportunities within the company where possible.