"Any action of this nature is taken only after much deliberation”
Xerium Technologies, a global manufacturer of clothing and roll covers used primarily in the paper production process, recently announced a voluntary redundancy program at its press felt facility in Buenos Aires, Argentina in connection with the relocation of its Huyck.Wangner press felt capacity and initiated consultation proceedings with its works' council at its rolls cover facility in Meyzieu, France regarding a proposal to cease operations there. In Argentina, the production of press felts and fiber cement felts would be transferred to the Company's facilities in Brazil and the roll cover production of its facility in France would be transferred to the Company's rolls facilities in Germany and Italy. The actions are expected to be completed over the next several months.
Commenting on the action, Stephen R. Light, the Company's Chairman, President and Chief Executive Officer said, "Any action of this nature is taken only after much deliberation. This action helps align our rolls and press felt capacity with current and future market demands. With these actions, Xerium will maintain its leadership position in the global paper industry with state of the art facilities strategically located in North and South America, Europe and Asia."
Although the final costs will not be known until the actions are complete, the Company estimates it will incur approximately $10.1 million in restructuring charges, including $2.8 million of non-cash impairment charges, beginning in the third quarter of 2012 through the planned completion of shutdown activities in the fourth quarter of 2012. The Company estimates it will make approximately $5.8 million in net cash payments related to various personnel, facility and capital expenditure costs associated with these plans, which are net of proceeds on the sale of certain assets. The Company estimates these actions will result in future annual pre-tax savings of $2.6 million.