Bradken has confirmed it will close its Kilburn foundry by the end of 2015 with almost 120 workers to lose their jobs.
Managing director and chief executive officer Brian Hodges told InDaily that the operation was no longer profitable and competitive with global, international plants.
“It’s a difficult time for the company and for the employees who, as everybody does, do a really good job,” Hodges said.
“We have to move with the times which basically means to move to larger, more modern plants offshore.”
Hodges said Bradken had attempted to expand the plant at Kilburn quite considerably but the cost of maintaining the plant was too high compared with running sites abroad, such as in China.
“It is a well run plant with an excellent work force but it’s not competitive.”
A letter was sent to the site’s 119 employees on Tuesday announcing the company would “phase out” its Kilburn operation.
Hodges confirmed operations at the site stopped after the letter was distributed. He said production would halve three or four months before the close of 2015 and work would “ramp down progressively”.
The letter, signed by executive general manager of mineral processing Brad Ward, attributed the closure of the plant to the high costs of labour, site services and utilities that make the foundry “unsustainable”.
“Bradken will work with you to provide support and identify opportunities for alternate employment wherever possible once the timing of the closure is clearer,” the letter says.
“If you are unable to be offered redeployment and undertake the required relocation, redundancy packages will be available. Redundancy entitlements are secure and will be paid per your EBA or contract.”
Minister for manufacturing Susan Close said the Government would contact Bradken to offer retraining and other support to the workers in the lead up to the expected shutdown next year.
“Our priority is to sit down with those workers to work out what kind of package they’ll be offered by the company, the terms of their entitlements but also discuss any retraining and help they need to find new jobs,” Close said.
She said this emphasised the need for Australia’s future submarines to be built in South Australia.
“South Australia needs those jobs for the workers who are coming out of some of the traditional manufacturing sectors.”
Bradken is a global manufacturer of consumable and capital products and supplies transport, industrial, engineered and mining products, mineral processing and cast metal services to international markets. It produces fully machined cast iron and steel products from a mass of 1kg to over 25 tonnes.
In May InDaily reported the company would close some Australian operations and move to lower cost sites. It estimated 530 jobs would be cut globally but would not comment about the future of the Kilburn site.
The Kilburn plant recently underwent a $3.8 million upgrade. As part of that process, the company removed more than 1,700m2 of asbestos sheeting and replaced the entire roof structure.
Bradken’s 2014 annual report showed a 14 per cent decline in sales revenue between 2013 and 2014, dropping to $1,135 million.
The report said the global Bradken workforce had downsized from 6200 employees in 2012 to 5425 in 2013 and 4800 this year.
Bradken chairman Nick Greiner wrote the 2013-14 financial year had been a “significant challenge” requiring some “difficult decisions”.
“We have been required to make some tough decisions in terms of employee retention, with the current challenging market conditions necessitating the reduction of our employment levels to match the market downturn,” Greiner said.
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