Fabricator Heerema to axe 450 jobs, wind price pressure adds to pain

Heerema Fabrication Group (HFG), which makes offshore steel structures for the oil and gas and wind markets, will cut 450 jobs, more than half of its headcount.

The Dutch company on Wednesday announced a reorganisation to adapt to "strongly decreasing volume of work."

The decision is in response to poor market conditions in the oil and gas industry, as well as increasing competition and the combination of price pressure and unfavourable contractual conditions in the wind energy market, HFG said.

The reorganisation is expected to lead to 450 job losses, including compulsory redundancies, at the company, which currently employs 770 people.

HFG says the plan will allow it to continue operations at all its yards in Vlissingen and Zwijndrecht in the Netherlands, Hartlepool in the UK and Opole in Poland as it retains some optimism about the future. "The expectation is that, due to growing energy requirements in the long term, the number of projects in the market will increase again in the future," said chief executive Koos-Jan van Brouwershaven.

The news comes as the International Renewable Energy Agency (IRENA) on Monday projected that the offshore wind sector could grow more than 650% by 2030, reaching 100 GW, driven by falling costs and technology innovations.

Bloomberg New Energy Finance (BNEF), meanwhile, said that offshore wind power costs have dropped 22% between the first and the second half of 2016 to a benchmark (weighted average) estimate of USD 126 (EUR 114) per MWh on the back of auction programmes in Netherlands and Denmark that have led to strong competition between bidders.

(USD 1.0 = EUR 0.902)

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