Veolia Environnement SA (VIE), Europe’s largest water and waste utility, plans to sell a unit that designs and builds water and sewage installations, a union said.
The plan to sell Sade, part of the Veolia Water division and billed by the utility as the leading pipe installer in Europe, was revealed by an executive of the unit, Jerome Gareche, a representative of the CFDT union, said by telephone today. Les Echos newspaper reported earlier that Veolia’s board will consider the sale at a meeting Dec. 11.
A spokeswoman for Veolia wasn’t immediately able to comment when reached by phone.
Veolia is in the midst of a reorganization of its water division to improve profits, in part through cutting staff. The utility confirmed yesterday the loss of 700 jobs as part of a proposal in March to eliminate about 10 percent of the workforce at the division in France.
Sade, which is headed by Dominique Bouillot and has about 9,000 employees, reported net income of 18 million euros ($24.5 million) last year on sales of 1.4 billion euros, according to its website. The company is expanding outside Europe and has won orders for construction work on networks in the Republic of Congo, Iraq and Peru.
Veolia, vying with Suez Environnement (SEV) for French waste and water contracts, is two years into a turnaround plan to reduce its global reach, curb debt and raise profit. The utility has been hurt by an industrial slowdown in Europe that cut waste-handling volumes, while French municipalities have demanded lower prices for water services.
The company intends to lower costs by 170 million euros this year and save 750 million euros by 2015. By the end of September, the utility had reported net savings of 109 million euros.
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