PKC Group Oyj - Company Announcement

PKC GROUP TO START DEVELOPMENT PROGRAM IN EUROPE AND SOUTH AMERICA

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





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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.