Xerium closes Quebec plant due to high costs
Xerium Technologies is closing its paper machine clothing facility in Warwick, Que., and will transfer production to the company’s lower-cost plants outside of North America. The Warwick facility employs about 120 people.
“The Warwick plant has a great history of making high-quality products. Unfortunately, it also is a very high-cost plant that has a cost structure that is almost twice as high as Xerium’s low cost plants due to several key factors including: pension and benefit costs, machine uptime, productivity, and a declining local-market business,” explained Harold Bevis, Xerium’s president and CEO.
The machine clothing business is mostly build-to-forecast wherein customers order ahead of time. This allows Xerium to meet the demand from low-cost facilities outside of North America, the company said.
“Several of Xerium’s competitors provide very high-quality products and have much more advantaged cost structures and plant locations. The only way to fight back against this structural setback is to be more productive – i.e. – to get more production out for the same amount of manhours/cost. Unfortunately, this was not the case at Warwick,” said Bevis
Most of Warwick’s production will move to Europe.
Bevis commented that Xerium intends to “fix its global cost issue in the machine clothing business,” and that there are other Xerium facilities with “serious issues.”
Xerium Technologies is a leading global provider of industrial consumable products with 26 manufacturing facilities in 12 countries, and 3,100 employees. The company underwent bankruptcy proceedings and restructuring in 2010. Its most recent quarterly report states that the machine clothing portion of its business is undergoing a multi-year optimization.