Pfleiderer board approves closure of two plants
The Supervisory Board of Pfleiderer AG has agreed to the closure of the particleboard plant in Ebersdorf and the MDF plant in Nidda, Germany, as proposed by the Executive Board. The closures will affect around 300 employees, including administrative offices in Neumarkt and Gütersloh.
"This is a bitter decision for those concerned, but regrettably unavoidable in view of the substantial over-capacities for particleboard and MDF in Europe. In combination with the continual price increases in raw materials such as wood and adhesive, and energy costs, the continued operation of both plants is no longer feasible", said Hans H. Overdiek, Chairman of the Executive Board of Pfleiderer AG. "With the well-being of the German business in mind, this consolidation was unavoidable in the long term. We have therefore decided on this step."
The closures will lead to one-off costs of about EUR 42 million, of which approximately EUR 25 million will have a cash effect. This is partly counteracted by expected revenue from the sale of plant and property in the amount of approximately EUR 25 million. The company is currently negotiating with interested parties for the plant and potential buyers of the sites, who intend to manufacture other products here.
In Ebersdorf the delivery of particleboard to customers will stop at the end of December 2010, and production in Nidda will cease at the end of June 2011.
"This is a bitter decision for those concerned, but regrettably unavoidable in view of the substantial over-capacities for particleboard and MDF in Europe. In combination with the continual price increases in raw materials such as wood and adhesive, and energy costs, the continued operation of both plants is no longer feasible", said Hans H. Overdiek, Chairman of the Executive Board of Pfleiderer AG. "With the well-being of the German business in mind, this consolidation was unavoidable in the long term. We have therefore decided on this step."
The closures will lead to one-off costs of about EUR 42 million, of which approximately EUR 25 million will have a cash effect. This is partly counteracted by expected revenue from the sale of plant and property in the amount of approximately EUR 25 million. The company is currently negotiating with interested parties for the plant and potential buyers of the sites, who intend to manufacture other products here.
In Ebersdorf the delivery of particleboard to customers will stop at the end of December 2010, and production in Nidda will cease at the end of June 2011.
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