UCAR International Inc. will close its graphite electrode factory in Welland, Ont., by the middle of next year, in a cost-cutting move that will eliminate 280 jobs in southern Ontario, the company said.
UCAR, which was spun off from Union Carbide Corp. and has operated the Welland plant since 1917, said the closing is part of a broader effort to close plants and cut production as the weakening global economy cuts demand for steel and graphite electrodes.
In all, UCAR plans to cut 700 jobs, or 12 percent of its work force, and close a graphite electrode plant in Berlin, Germany, while eliminating about 200 jobs at its graphite electrode plant in Vyazma, Russia, which will continue to operate at a reduced capacity.
"The decision to close the Welland plant is a regrettable, but necessary one for UCAR to make," said Paul Calarco, the facility's general manager.
The plant, which also makes ferro alloys, carbon electrodes, carbon cathodes and other carbon and graphite products, is expected to stop production by the middle of next year.
The consolidation, combined with additional steps to cut costs and consolidate administrative operations, is expected to save UCAR about $330 million during the next three years. The company also is cutting 150 administrative jobs and moving its headquarters to Nashville, Tenn., from Danbury, Conn., to be closer to its two Tennessee plants.
UCAR, which was spun off three years ago, said the decisions to close its Welland and Berlin plants, while reducing production at its Russian facility, will reduce the western world's graphite electrode manufacturing capacity by about 4 percent.
Graphite electrodes are used to heat furnaces at steel minimills, which make steel from molten scrap metal. Those minimills have been cutting back production as the slowing economy reduces demand.