Around 70 jobs are at risk after performance textiles firm Low & Bonar revealed plans to transfer part of its Bonar Yarns operation from Dundee to Abu Dhabi.
Senior management informed workers of the decision during meetings at the division’s Caldrum Works site in St Salvador Street on Tuesday.
Low & Bonar, which was founded in Dundee more than a century ago, said it had now entered into aformal 30-day consultation period with all 127 staff at the site.
Ultimately, it is expected that more than half of the total local workforce will be maderedundant as a result of the changes being implemented.
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The yarns operation in Dundee produces a range of carpet backing products and its artificial grass surfaces are used by sports teams including Saracens and Newcastle Falcons in the English rugby premiership and a number of top American football clubs.
A spokeswoman for Bonar Yarns said “operational improvement measures” were vital if the business was to prosper in the longer term.
“Despite taking measures to improve the performance of Bonar Yarns, the business continues to operate in a highly competitive environment which brings continuedpressure on sales prices and margins,”she said.
“Following an in-depth analysis todetermine the best way to further improve the performance of the Bonar Yarnsbusiness unit, the strategic decision has been made to relocate part of the Bonar Yarns production from Dundee to Abu Dhabi.
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“This has resulted in the commencement of a formal consultation process with employee representatives on the site, which we expect could affect up to 68 jobs.
“We know that this will be a period of uncertainty for our staff at Dundee and we are committed toconsulting fully with our employees and their representatives.
“Operational improvement measures are essential, and we believe the restructuring of our business will help us secure thelong-term viability and competitiveness of Bonar Yarns in the global marketplace.
“Throughout this process we willmaintain our focus on delivering to our retained customer base and meetingcustomer demand.”
The move is one of the first major pieces of restructuring ordered under the regime of new chief executive Brett Simpson, who joined the company last month.
His arrival came on the back of a profits warning arising from problems within the firm’s civil engineering arm where a loss of £1 million is predicted this year.
The warning wiped more than £50m off the market value of the group in a single trading session but the group is still on track to increase pre-tax profits from last year’s levels to between £25.3m and £26.5m.
“We do believe the restructuring of our workforce is necessary to help us secure the long-term viability and competitiveness of Bonar Yarns in a highly competitive global marketplace,” Mr Simpson said in astatement to the London Stock Exchange.
Low & Bonar started out life in 1903 as a Dundee jute merchant and has since grown into an international concern with a workforce of more than 2,000 worldwide.