Wellstream International Ltd. plans to lay off as many as 100 workers at its Panama City, Fla., operation.
The company, which extrudes flexible pipe for undersea operations, was acquired last month by London-based private equity company Candover Investments plc.
Wellstream, now based in Newcastle upon Tyne, England, blames a short-term lack of orders from the offshore oil and gas sector, particularly from its major growth market, Brazil.
Wellstream's chief customer there, the government-owned oil and gas company Petrobras, is undergoing a management shakeup after the recent election of a new government, according to Wellstream Chief Executive Officer Gordon Chapman.
``The workload in Panama City has been dropping off for some time,'' said Chapman, adding that plant utilization now is barely 25 percent.
Workers and management at the Panama City plant are involved in a two-month statutory consultation period following Wellstream's announcement April 21 that it expects to lay off up to half the work force. Layoffs, which will involve a cross section of staff, are to take place later this year and early in 2004.
The Florida facility, the older of Wellstream's two plants, operates one extrusion line and produces pipe as large as 10 inches in diameter. The 250,000-square-foot plant in Newcastle has two extrusion lines and can make pipe as large as 17 inches in diameter, according to Chapman.
Business suffered from several months of uncertainty about the future of Wellstream, which was put up for sale as a noncore operation by Houston-based Halliburton Co., said business development director Steve Davey.
``We inherited a company with good long-term prospects but a poor short-term order backlog,'' said Davey who is part of a new management team at Wellstream. The team expects business to pick up for offshore oil and gas applications, including sophisticated pipe for deep deposits.
In the short term, Wellstream said it expects to win business with new plastics products it has been developing for land-based applications for the oil and gas sectors. Those products will include high-pressure nylon and high density polyethylene pipe, Chapman said.