Qualceram is negotiating up to 80 redundancies at the Shires bathroom ceramics business it acquired in Britain last month.

After a detailed review of the Shires operation, Qualceram has decided to reduce the current workforce of 930 people to about 850.

The rationalisation will cost between £500,000 and £1 million sterling (€1.69 million), according to Qualceram company secretary Mr Aidan Clince. The Irish bathroom products manufacturer acquired Shires in a £54 million deal in September. At that time, Qualceram said it would review all its operations to get cost savings and operational efficiencies at Shires and between Shires and Qualceram. Shires was built up through a number of acquisitions, but very little rationalisation was carried out, Mr Clince explained.

While the UK operation was profitable, its operating margins were well below those at Qualceram, he said.

Qualceram will sell its distribution centre at Elland in Yorkshire and consolidate distribution at the nearby Shires site in Bradford.

In an ongoing review, Qualceram is examining its production operations to ensure the best use of group facilities.

"We are aiming to service each market from production facilities in the same country," Mr Clince said. Both companies have ceramic plants and acrylic plants, so some Qualceram products may be manufactured in the UK and some Shires products may be manufactured in the Republic, he explained. Asked about the disposal of Qualceram's 50 per cent stake in Vitra Tiles (Ireland), Mr Clince said negotiations with its Turkish joint venture partner, Eczacibasi Karo Sermaik, were continuing.

Qualceram announced its intention to sell its Vitra stake after it concluded the Shires deal because of conflicts of interest. "We are looking to finalise by year-end," he said.