PKC Group Plc Company Announcement 7 August 2014 8.16 am
PKC GROUP TO START DEVELOPMENT PROGRAM IN EUROPE AND SOUTH AMERICA
PKC starts a development program as a continuation for the consolidation of the wiring systems business in Europe and South America. The development program is started due to the expected change in the business environment where consolidation of customers will result in change in purchasing behaviour that requires new production structure and model in Europe and South America. Program shall bring growth opportunities also through benefits of scale and redirecting resources.
The development program comprises the following four components:
1. Maximising the production capacity in Europe in modern competitive factories in Serbia and Lithuania.
- The objective is that by the end of 2016, more than half of Europe’s production capacity is in these factories. The production of factories in Sosnowiec (Poland) and Haapsalu (Estonia) will be ramped down by the end of 2014. The Sosnowiec and Haapsalu factories employ about 900 persons.
2. Improving the production and logistics in South America.
- The purpose is to develop a new cost-efficient and flexible operating model by the end of 2015. The use of production capacity is improved by ramping down the production in Itajuba factory (Brazil) by the end of 2014. Itajuba factory employs about 500 persons.
3. Improvement in customer operations by centralising Europe’s and South America’s NPI (New Product Introduction) functions Keila factory in Estonia.
4. Streamlining of overlapping sales, R&D, purchasing, administrative and production support functions in Europe and South America.
Program shall be completed by the end of the first quarter of 2016. Program is estimated to result in EUR 12-14 million annual cost savings when completed. The related non-recurring items are estimated to be close to EUR 20 million, out of which approximately EUR 10 million is non-cash. Non-recurring items are estimated to be fully recorded during the second half of year 2014.
PKC GROUP PLC
Board of Directors
Matti Hyytiäinen
President & CEO
For more information, please contact:
Matti Hyytiäinen, President & CEO, PKC Group Plc, tel. +358 (0)400 710 968 (7 August from 8.15 am to 1.30 pm)
Juha Torniainen, CFO, PKC Group Plc, tel. +358 (0)40 570 8871
DISTRIBUTION
NASDAQ OMX
Main media
www.pkcgroup.com
PKC Group is a global partner, designing, manufacturing and integrating electrical distribution systems, electronics and related architecture components for the commercial vehicle industry and other selected segments. The Group has production facilities in Brazil, China, Estonia, Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the USA. The Group's revenue in 2013 totalled EUR 884.0 million. PKC Group Plc is listed on NASDAQ OMX Helsinki Ltd.