The reorganisation, which follows the recent appointment of Wes Lucas as president and chief executive officer, involves the investment in new state-of-the-art equipment and the decommissioning or relocation of certain existing assets.
The announcement is part of Quebecor’s long-term strategic plan to meet the changing needs of the publishing industry. The company’s US book facilities will become more focussed on specialising in specific product lines.
This specialisation, combined with the new equipment, will permit the facilities to improve efficiencies and better serve Quebecor World’s book and magazine customers.
This plan will result in the closing of a book manufacturing facility in Kingsport, Tenessee and a magazine facility in Brookfield, Wisconsin. The closings will affect about 735 employee positions, 425 in Kingsport and 310 in Brookfield.
The work produced at these two facilities will be transferred to other plants in Quebecor’s book and magazine platforms. The closures are expected to be completed by the third quarter of 2006.
The closure of the Kingsport and Brookfield facilities will involve restructuring charges of about US$30m, of which 50 per cent is composed of non-cash items. The majority of this charge will be recorded in 2006.
Quebecor World Inc ,, the world’s second-biggest publicly traded printer, is spending more than $500m on new presses to makes plants more efficient, allowing Quebecor World to cut staff and reduce annual expenses. The company reported a fourth-quarter loss in February after writing down the value of equipment in France and the U.K.
Standard & Poor’s Ratings Services cut the printer’s rating on debt by one level to three below investment grade after the fourth-quarter loss was bigger than expected. It was the second rating cut since November. Quebecor World prints Ikea catalogs, Time magazine and the Harry Potter books.
Most of its major product categories include magazines, inserts and circulars, books, catalogues, direct mail, directories, digital pre-media, logistics, mail list technologies and other value added services.
Quebecor World has around 31,000 employees working in more than 130 printing and related facilities in the US, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, Switzerland and the UK.
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