U.S. tar­iffs prompt work shar­ing in Que­bec

The Welland Tribune - - Business - ROSS MAROWITS

MON­TREAL — ADF Group Inc. says un­cer­tainty over U.S. steel tar­iffs re­duced or­ders and prompted it to in­tro­duce work­shar­ing for em­ploy­ees at its Que­bec plant.

“Back­log growth is paramount to our suc­cess, and un­for­tu­nately, the un­cer­tainty sur­round­ing the steel import duty was a gamechanger for many of our clients and neg­a­tively im­pacted our ca­pac­ity to suc­cess­fully close ma­jor bids dur­ing the first quar­ter,” co-chair­per­son and CEO Jean Pas­chini said dur­ing a con­fer­ence call.

The com­pany an­nounced tem­po­rary lay­offs at the end of March.

As of Mon­day, about 120 em­ploy­ees at its Ter­re­bonne plant have seen their work­ing hours cut 40 to 60 per cent and will re­ceive Em­ploy­ment In­surance ben­e­fits to off­set the re­duc­tion.

ADF said the pro­gram approved by the fed­eral govern­ment will al­low the com­pany to man­age its costs un­til steel fab­ri­ca­tion work be­gins on re­cently awarded projects.

“As the U.S. trade pol­icy on steel be­came some­what clearer and un­cer­tain­ties sub­sided in the fol­low­ing weeks, we were able to se­cure $95 mil­lion worth of new con­tracts in the United States be­fore the close of the first quar­ter,” he told an­a­lysts.

The Trump ad­min­is­tra­tion im­posed 25 per cent tar­iffs on imports of steel and 10 per cent tar­iffs on alu­minum against sev­eral coun­tries ef­fec­tive March 23.

It ini­tially gave Canada, Mex­ico and the Euro­pean Union ex­emp­tions, but those were lifted June 1, prompt­ing a re­tal­i­a­tion from the Cana­dian govern­ment.

Pas­chini said the com­pany is look­ing for ev­ery op­por­tu­nity to im­prove the ef­fi­ciency of its plants and has a strong pipe­line of po­ten­tial new con­tracts.

“No doubt the road ahead will be chal­leng­ing but, as we did in the past, we will con­tinue to work hard, roll up our sleeves to adapt to a pre­vail­ing mar­ket con­di­tion and trend.”

ADF lost $910,000, or three cents per share, in its fis­cal first quar­ter as rev­enue dropped by more than 40 per cent year-overyear.

The loss com­pared with a yearear­lier net in­come of $354,000 or one cent per share.

Rev­enue for the pe­riod ended April 30 fell to $28.5 mil­lion from $48.6 mil­lion be­cause of a drop in busi­ness vol­ume, as cer­tain fab­ri­ca­tion projects were nearly com­pleted be­fore newly-signed con­tracts were started.

Its or­der back­log was $158.7 mil­lion, up from $85.5 mil­lion at Jan. 31.

The back­log in­cludes $95 mil­lion worth of con­tract awards in the United States that were an­nounced on April 23.

In ad­di­tion to Ter­re­bonne,

ADF has plants in Great Falls, Mont., and Mi­ami, Fla.

TARA WAL­TON THE CANA­DIAN PRESS FILE PHOTO

ADF Group Inc. has an­nounced that work­ers at its plant in Que­bec have seen their hours cut, but will re­ceive Em­ploy­ment In­surance ben­e­fits.

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