Johannesburg - Industrial gas supplier African Oxygen (Afrox), a subsidiary of Germany's Linde, launched a cost-cutting plan on Friday that could include job cuts as it grapples with weak demand in its domestic market.
Shares in Africa's biggest gases group slumped as much as 8 percent after the announcement and were still down 7 percent at the close, the stock's biggest one-day fall since May last year.
Tentative economic growth in South Africa has crimped demand for Afrox's nitrogen, oxygen and welding electrodes, which are used by industries ranging from auto manufacturing to mining.
“It is expected that these market conditions will remain in the medium term,” it said on Friday.
“The company needs to significantly reduce its fixed cost base to ensure an acceptable level of trading performance in the future.”
The company is also reviewing its operations abroad, along with its distribution network and product portfolio.
It gave no indication of how much it wants to save nor how many jobs could be lost. - Reuters