April 12, 2012 / 3:13 PM / in 6 years

UPDATE 1-Novelis to close aluminum plant in Canada

* To close Saguenay in Jonquiere, Quebec

* Plant will cease production in August

* Saguenay employs 157 staff and production workers

April 12 (Reuters) - Aluminum products maker Novelis Inc, which has cut its fiscal 2012 earnings estimate because of lower shipments and soft demand, will close its Saguenay Works in Jonquiere, Quebec.

The plant has 157 staff and production employees and makes aluminum coils to supply other Novelis facilities. It will cease production in August, said Novelis, the U.S. unit of India’s HindalCo Industries Ltd.

“While the long-term growth potential of Novelis remains strong, we must continue to optimize our footprint to more efficiently support our overall business objectives to drive profitable growth,” President and Chief Executive Officer Philip Martens said on Thursday.

Novelis said after a review of its manufacturing operations in North America, it determined the Saguenay closure was necessary to “right-size” production capacity in North America.

In February, Novelis cut its fiscal 2012 earnings estimate for a second time, citing lower shipments because of soft demand in Europe and weakness in its electronics business in Asia.

It now expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.05 billion to $1.08 billion for fiscal 2012 — down from its previous target of $1.10 billion to $1.15 billion. It had reduced that forecast from a range of $1.15 billion to $1.20 billion last November.

The Saguenay Works opened in 1971.

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