East Midlands brickmakers to axe 600 jobs

East Midlands brickmakers Forterra and Ibstock are set to make 600 people redundant after the firms reported huge dips in demand for their products.

Forterra is to axe 225 jobs and mothball its flooring manufacturing facility at Swadlincote in Derbyshire after revealing that demand for its products had dropped by 20%.

The firm says that despite “encouraging” signs that its market is returning, revenue Group revenue declined by 39% for the five months to 31 May compared with the corresponding period in 2019, with a year-on-year decline of 86% in April and 62% in May. It also said that it expects output in 2021 to be 20% down on last year.

A statement from Forterra said: “We are currently manufacturing at twelve of our eighteen facilities and are preparing to further increase production as demand requires. We anticipate recommencing production at most of our remaining facilities by the end of July and retain full flexibility to reopen facilities sooner should demand increase at a faster rate than expected.

“In the coming weeks we will consult with employees on our plans, which include proposed changes to shift patterns and adjustments to the size and structure of support functions. Additionally, these proposals include consolidating the manufacture of all precast concrete flooring products at our Hoveringham facility in Nottinghamshire. This proposal will necessitate the mothballing of our hollowcore flooring manufacturing facility at Swadlincote in Derbyshire once the current order book is completed.

“These proposals will not affect our ability to service key customers or our specialist precast concrete facility at Swadlincote.

“These actions, if implemented, will regrettably lead to the loss of approximately 225 jobs, primarily from our concrete products facilities.”

Forterra said that it access to a £150m revolving credit facility which runs to July 2022, which is currently fully drawn. At 31 May, the firm had cash reserves of £79m as well as access to an undrawn overdraft facility of £10m.

Meanwhile Leicestershire-based Ibstock said that revenues for the three months to 31 March 2020 were down by approximately 10% compared to the comparative period last year, with a decline of around 75% in the two months to 31 May 2020.

The company says 375 jobs are at risk – approximately 15% of its workforce.

A statement from Ibstock said: “Whilst the changes anticipated will ensure our business is adapted to the near-term industry demand outlook, we retain the flexibility to scale production back up, as and when demand recovers.”