STOCK EXCHANGE RELEASE
November 30, 2007
In July, Rapala VMC Corporation ("Rapala") announced its plans to
consolidate all its French operations to Morvillars in Eastern
France. Negotiations with personnel and labour unions have now been
completed and execution of the plan has started.
Rapala aims to move the distribution unit Ragot from Loudeac in
Bretagne and the distribution unit Waterqueen and the fishing line
supplier Tortue from Saint Marcel in Central France to Morvillars.
The distribution operations of VMC Europe will also be moved to the
same premises. This consolidation of operations will affect almost 90
persons in France, and they were all offered work in the new
location. The relocation of Ragot has already started and will be
completed in the next few weeks. The Waterqueen and Tortue moves are
planned for mid-2008 and VMC Europe during the third quarter of 2008.
Based on negotiations with personnel, only some 20% have indicated
their willingness to move to the new location. Accordingly, new
personnel will be recruited in Morvillars. Based on this and other
available information regarding the consolidation of operations,
Rapala will book a restructuring provision of 2.8 MEUR in the fourth
quarter. In addition to the 0.1 MEUR expense booked in the third
quarter, this restructuring will cause some 0.5 MEUR other expenses
that will be booked during the next 12 months.
The new leased premises in Morvillars have been prepared for the
consolidated operations. The total investment in the new distribution
centre including also IT is 0.5 MEUR. The plan is also to invest 0.4
MEUR in line spooling facilities in order to further improve
operations.
Rapala expects to sign a sale agreement for the warehouse and office
building in Saint Marcel before the end of the year and is expecting
to book a capital gain of some 1.3 MEUR in the fourth quarter. The
plan is also to sell the warehouse and office building in Loudeac.
With the consolidation of the operations to one location in France,
the Group plans to gain major savings and efficiency improvements in
deliveries and transportation, customer service and marketing,
procurement and supplies, maintenance, organisational synergies and
other location and logistical benefits. After all relocations have
been made and the new organisation is up and running, the annual
savings are expected to reach 1-2 MEUR."This is a major change for our operations in France but it will
improve our competitiveness and ensure that we can continue with
major manufacturing and distribution operations in France in the
future despite tough competition," states Stanislas de Castelnau,
Head of Fishing Hook Business & Distribution in France.
RAPALA VMC CORPORATION
Jorma Kasslin
Chief Executive Officer
For further information:
Jouni Grönroos, Chief Financial Officer, tel. +358 9 7562 540
Olli Aho, Company Councel, tel. +358 9 7562 540
Distribution:
Helsinki Stock Exchange
Main Media
Rapala VMC Corporation is a leading fishing tackle company and the
global market leader in the fishing lures, treble hooks and fishing
related knives and tools. The Group also has a strong global position
in other fishing categories. The Group has its own distribution
companies in all the main markets and the largest distribution
network in the industry. The main manufacturing facilities are
located in Finland, France, Estonia and China. The Group brand
portfolio includes the leading brand in the industry,
Rapala, and other global brands like VMC, Storm, Blue Fox, Luhr
Jensen, Williamson and Marttiini. The Group, with net sales of EUR
227 million in 2006, employs more than 4 000 people in 29 countries.