Business News
GLV Inc. Announces Cost-Reduction Measures in the Pulp and Paper Group
Tuesday 30. December 2008 - In response to the global economic slowdown, management of GLV Inc. ("GLV" or the "Company"; ticker symbols GLV.A, GLV.B / TSX) announces it has implemented measures in North America and Europe that will allow the Pulp and Paper Group to reduce its operating costs by some $5.5 M annually.
These measures consist primarily in the abolition of 45 positions in North America and in Europe, which represents approximately 6% of the Pulp and Paper Groups total number of employees. These measures will result in non-recurring restructuring costs of between $2.5 M and $3.0 M, in aggregate, to be recorded in the third and fourth quarters of fiscal year 2009.
“As we had expected and indicated upon announcing our second-quarter results last November, the current economic uncertainty is leading pulp and paper producers to postpone their large investment projects for new infrastructures. This situation has started to slow down the Pulp and Paper Groups order bookings in relation to new equipment projects, which is why we decided to immediately proceed with a streamlining of its North American and European organization. The measures implemented in the group also provide for a stronger focus of its business development efforts in the aftermarket, where demand remains solid as is generally the case when investments in new pulp and paper equipment slow down. In light of the current situation, the Pulp and Paper Groups objective in upcoming quarters will be to fully capitalize on its global leadership in the lucrative aftermarket, which accounts for 40% to 50% of its revenues and where it benefits from one of the most extensive installed equipment bases worldwide. We are confident that the group will continue to perform well in the aftermarket, especially since it recently set up a European business model similar to the one that has proven successful in North America for several years,” pointed out Richard Verreault, President and Chief Operating Officer of GLV.