BoConcept centralises its Danish production activities
BoConcept would gain annual savings of DKK 10 million by moving all its Danish
manufacturing activities to Ølgod, already being the site of most of the
company's own production and its principal European distribution centre
To ensure that operations continue to be cost-effective and adaptable to market
trends, BoConcept contemplates to close down its board furniture factory in
Herning and centralise its board furniture production at the company's factory
in Ølgod. The company's present administrative functions and head office would
remain in Herning.
BoConcept, whose global supply strategy is based on sourcing rather than own
production, would keep its board furniture production in Denmark, which has
proved more effective than sourcing. Centralising the company's own board
furniture production in one location will allow a better utilisation of
capacity and enable investment in new production technology. This in turn will
increase the competitiveness of the company's production.
BoConcept's financial results for the first half of 2008/2009 will be announced
earlier than planned, immediately following this announcement.
Consequences of closing down production in Herning
All production in Denmark would be moved to Ølgod over a short period; the
Herning plant would presumably stop producing the last time in February 2009.
The company would shed 40 jobs in production, which will make a total of 90
since the beginning of the financial year. The employees involved would be
notified. All would be offered a severance pay scheme and assistance in getting
new jobs, the latter taking the form of job search courses and similar
initiatives.
Some of the production equipment in Herning would be moved to the factory in
Ølgod; the remainder sold off. Otherwise, no additions would be made to
production equipment in connection with the move to Ølgod. Tenants would be
sought for the vacant premises in Herning.
Closing down production in Herning would bring about annual savings of at least
DKK 10m before any rents from the available production units starting in the
2009/2010 financial year. Restructuring costs incidental to the shutdown are
expected in the region of DKK 10m in the current financial year.
Financial results in the first half of 2008/2009 and forecast for 2008/2009
The financial results for the first half of 2008/2009 and the forecast for the
full year of 2008/2009 will be explained in BoConcept's announcement of
financial results for the first half of 2008/2009, which will be forwarded to
the OMX Nordic Exchange immediately after this announcement.
For further details, please contact President and CEO Viggo Mølholm or Vice
President and CFO Hans Barslund on tel. +45 7013-1366 who will not be available
until after 2.30pm due to internal information meetings.
