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Kvaerner regroups to boost profits

KVAERNER IS to merge its construction, process engineering and metals businesses within a new Engineering & Construction division next month.

Current group business director John Fletcher will head up the new division, formed as part of a major internal shake up at the Norwegian-owned conglomerate. Kvaerner Construction chief executive Keith Clarke will head the new division's construction arm.

The group was unable to say how many of its 80,000 staff worldwide would be axed as a result of the reorganisation, as NCE went to press. Details are expected to be released at the end of the month, although it is understood that most redundancies will be from administration and support staff.

News of the move was due to coincide with the publication of Kvaerner's interim results yesterday. The company has already said that it is underperforming and that internal streamlining is needed if profits are to increase.

The spokesman said the businesses to be united under the E&C banner have common areas of expertise and are increasingly interchangeable. In the face of aggressive global competition the existing organisational structure is considered unsustainable.

The newly structured E&C division will 'make better use of resources' and eradicate skills duplication, said Kvaerner. It is intended that business be consolidated around project management expertise, perceived to be the group's core resource.

The company ruled out future expansion or withdrawal from existing markets. The group says it had been planning the shake up since it bought Trafalgar House two years ago.

Kvaerner's reorganisation also includes the establishment of an Industrial Products division led by Jan Mage Heggerlund. This will replace Pulp & Paper, Energy, and Manufacturing. Andrew Mylius

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