Terrafame concludes change negotiations carried out in accordance with the Finnish Co-operation Act 1.3.2022 15:00
In 2021, Terrafame carried out a significant investment when it launched its new battery chemicals plant. The plant serves the globally growing e-mobility market, which requires an ever-increasing supply of responsible battery materials. Terrafame is expanding its battery chemicals business, and during this expansion, the company’s underlying business must also be efficient and profitable.
In January 2022, Terrafame announced that it had initiated a cost savings programme, which aims at EUR 10 million annual savings and improving cost competitiveness and profitability of the company.
As part of the cost savings programme, Terrafame has carried out change negotiations in accordance with the new Finnish Co-operation Act between 17 January and 28 February 2022. The negotiations concerned approximately 680 of Terrafame’s hourly, salaried and senior salaried employees. The personnel of the battery chemicals plant was excluded from the negotiations.
During the change negotiations, Terrafame and the personnel representatives managed to find various measures which generate annual savings of EUR 10 million. Terrafame will improve and optimize its subcontractor services resulting EUR 6,5 million annual savings. The implementation of these measures has already begun, and some savings have already been realised. EUR 3,5 million savings will be generated by reduction of personnel related costs.
In its change negotiation proposal in January, Terrafame prepared for a reduction of a maximum of 75 person-years. As an outcome of the negotiations, it has been decided that 65 person-years will be reduced on production-related and financial grounds and due to the reorganisation of operations. Out of these, 42 will be termination of employment contracts. The personnel in the scope of the redundancies will be offered support for the change and for finding new employment.
“I am pleased that most of the cost savings measures identified in the negotiations are not directed at the personnel. Unfortunately, however, we also have to reduce 65 person-years from our workforce. I am convinced that, supported by these measures, our profitability will be improved to ensure financially sustainable business also in the future,” says Joni Lukkaroinen, CEO of Terrafame.
Background of the cost savings programme
In 2021, Terrafame took a significant step towards expanding its business to battery chemicals production. The production ramp-up at the new battery chemicals plant started in June, and Terrafame delivered the first batches of products to customers in late 2021.
Efficiency and profitability of operations have been the most important goals of Terrafame ever since the company was founded. The company follows a continuous improvement model and is actively seeking ways to improve its profitability.
The battery chemicals plant project of the company as well as the launch of the battery chemicals business was delayed from the original schedule due to the coronavirus pandemic.
As part of the cost savings programme, on 10 January 2022, Terrafame issued an invitation to change negotiations on production-related and financial grounds in accordance with the Finnish Co-operation Act concerning all personnel groups, excluding the personnel of the battery chemicals plant. The production ramp up of the battery chemicals plant will continue according to the business plan.
Joni Lukkaroinen, CEO, tel. +358 20 713 0890, joni.lukkaroinen[at]terrafame.fi
Terrafame reduces the carbon footprint of transport by delivering responsibly produced battery chemicals to the global battery industry. One of the world’s largest production lines for chemicals used in electric car batteries is located on Terrafame’s industrial site. The plant is capable of producing nickel sulphate for around 1 million electric cars per year. The carbon footprint of the nickel sulphate produced by Terrafame is among the smallest in the industry globally. Terrafame’s integrated, unique and energy-efficient production process from the mine to battery chemicals is located on a single industrial site. It provides customers with a transparent, traceable and truly European battery chemical supply chain.
In 2020, Terrafame’s net sales amounted to EUR 338 million. Terrafame is the largest nickel producer in Europe by volume. Around 1,600 people work on its industrial site, half of whom are employees of partner companies.