Fenner PLC is refocusing and rationalising its conveyor belt manufacturing facilities, Engineered Conveyor Solutions (ECS), in North America in response to the slowdown in the coal industry.
This represents a significant step-change in the refocusing of the business with specific new product development, improved customer service and enhanced manufacturing efficiencies.
Key elements of the restructuring programme includes:
- Added focus on industrial belt markets with improvements in customer service levels and manufacturing efficiency, together with industry-specific new product development.
- A change of focus within the coal sector towards those customers who are able to withstand the challenges presented in their markets.
- The closure of the majority of the belt manufacturing facility at Port Clinton, Ohio (one of the two such facilities operated by ECS in North America).
- Significant additional savings in support functions, overheads and administration.
- Specific measures to address under-performing non-belt manufacturing activities.
These measures are intended to improve customer service levels and business efficiency. They will be introduced progressively over the remainder of the group's financial year.
ECS will also downsize its South American service business to reflect changing conditions in the copper mining industry.
It is projected that these measures will result in a reduction of over 20% of ECS Americas' workforce. The majority of the retrenchments are expected to be completed by the end of January 2016.
The annual cost savings arising from the restructuring are expected to amount to £10 million, beginning in the second half of this financial year. The cash cost of the restructuring is not expected to exceed this amount. However, further non-cash asset impairment charges could arise.
It is expected that the restructuring will be complete by the end of the group's current financial year such that, in FY17, the financial returns of ECS Americas will start to return to previous levels, despite revenues being less than one-half of those achieved at the peak.
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/handling/13012016/fenner-restructuring-in-response-to-a-challenging-coal-industry-43/