Date: 22 February 2010
The initiatives include restructuring and cost-reduction activities funded through Ferro's equity offering in November 2009 and the continuation of a multi-year restructuring effort that the Company announced in 2006.
As a result of the new initiatives, Ferro expects to discontinue manufacturing of dinnerware frit materials in Castanheira, Portugal. This action represents the final step in consolidation of high-volume frit production into the Company's manufacturing site in Almazora, Spain. The Company also announced plans to consolidate plastics manufacturing from Portugal to its existing plastics production facility in Almazora, Spain. Because of the manufacturing consolidation, the number of selling, general and administrative positions in Portugal are expected to be reduced as well. In total, approximately 125 positions are expected to be eliminated when the initiatives are completed by August 2010. Ferro continues to manufacture certain metal oxides in Portugal that are not affected by this announcement.
"We continue to take actions that ensure that our high-volume manufacturing operations deliver value to our customers and shareholders, now and in the future," said Ferro Chairman, President and CEO James F. Kirsch. "These new initiatives are expected to provide an additional reduction in our sales breakeven level as we restructure our global manufacturing assets to deliver a world-class cost structure."
The Company expects to record charges of approximately $14 million in the six month period ended June 30, 2010, related to the costs of these restructuring actions. The charges include approximately $8 million in severance costs, $3.4 million in asset write-offs and $1.4 million in dismantling costs. The initiatives are expected to generate pre-tax cost and expense savings of approximately $5 million on an annual basis.