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- Release Date: 29/06/12 11:10
- Summary: GENERAL: FBU: Consolidation of Formica production in Spain
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FBU
29/06/2012 09:10
GENERAL
REL: 0910 HRS Fletcher Building Limited
GENERAL: FBU: Consolidation of Formica production in Spain
Auckland, 29 June 2012 - Fletcher Building announced today that it is to
consolidate Formica's two manufacturing plants in Spain, with all
manufacturing to be undertaken at Formica's Valencia plant, and the closure
of Formica's plant in Bilbao. The decision to rationalise manufacturing from
two sites to one follows a review of the company's operations in Spain.
Mark Adamson, chief executive of the Laminates & Panels division, said the
review process had clearly identified significant overcapacity across its two
Spanish plants.
"Our volumes in Spain have decreased significantly over the past four years
and it is now simply not viable to maintain and support both facilities
running considerably below full capacity," he said.
"We remain committed to manufacturing in Spain, and by rationalising our
operations this will allow Formica to remain competitive in what is still a
very tough economic climate."
Formica is now in discussions with approximately 180 Bilbao workers and will
assist them to find alternative employment and discuss other opportunities
within the Formica Group. Some core administrative staff will remain at the
Bilbao site.
"As a result of the plant closure there will be a number of new positions
created at Formica's Valencia facility. We're encouraging those affected
workers to apply for those positions," Mr Adamson said.
Formica will retain its European production base in Valencia, along with its
other facilities in Kohlo, Finland and the UK.
"Following the consolidation of our operations in Spain, we believe we will
then have a better manufacturing base for Formica's European operations. The
Valencia facility will principally supply the domestic Spanish market and
other southern European markets, and we are committed to its long term
future. Production at Valencia will increase as the closure at Bilbao
progresses," Mark Adamson said.
Fletcher Building expects to incur approximately NZD$26m in one-off costs
associated with the closure of the Bilbao plant, which will be disclosed as
an unusual item in the financial year to 30 June 2012. Once completed, the
consolidation of the two manufacturing sites into one is expected to improve
pre-tax earnings in Formica Europe by approximately NZD$8-9m in the second
year.
Formica's Bilbao plant has been operating for 66 years. While negotiations
with those affected by this decision are still proceeding, it is expected
closure of the plant will take place before the end of the 2012 calendar
year.
For investor enquiries contact:
Bill Roest
Chief Financial Officer
Phone: + 64 9 525 9165
Mobile: + 64 21 990 779
Email: [email protected]
For media enquiries contact:
Stephen Smith
Corporate Affairs Advisor
Phone: + 64 9 525 9125
Mobile: + 64 21 375 166
Email: [email protected]
End CA:00224417 For:FBU Type:GENERAL Time:2012-06-29 09:10:09
