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Multi-Color Corporation Announces Manufacturing Consolidation Plan

Monday, December 08, 2003

Press release from the issuing company

CINCINNATI, Dec. 5 -- Multi-Color Corporation today announced plans to consolidate its Las Vegas, Nevada shrink sleeve label manufacturing facility into its other existing facility operations. Multi-Color expects to close the Las Vegas facility, which employs 17 associates, by mid-January 2004. "Today's business environment requires us to continuously look for ways to optimize our manufacturing assets," said Frank Gerace, President and CEO of Multi-Color. "Consolidating operations allows us to reduce overhead costs while continuing to meet service and quality requirements of our customers. This move will strengthen our competitive position in the marketplace. I would like to thank all of our Las Vegas associates for their hard work and commitment to Multi-Color during the period that we have operated the Las Vegas facility. They have worked hard to improve operations and increase productivity at the facility over the past several years." The Company also announced the purchase of a new $4.2 million state-of- the-art wide format gravure printing press to be installed and operational at its Scottsburg, Indiana facility by June 2004. In addition, the Company exercised its option in November 2003 to purchase the Scottsburg facility from under capital lease resulting in an approximate $400,000 annual interest cost savings. Gerace also stated, "Productivity improvements and installation of the new press at our Scottsburg location support our manufacturing strategy. In further support of our manufacturing strategy, the consolidation of operations is expected to reduce fixed costs by approximately $1 million annually." The Las Vegas facility presently produces a wide variety of shrink sleeve offerings. All of these products will continue to be produced and the Company's capacity for these products will not be affected. One of the Company's other facilities has regularly produced shrink sleeves and is a qualified supplier for all major Las Vegas customers. The Company's sales and marketing organization will be unaffected by the consolidation. In connection with the closure of the Las Vegas facility, the Company expects to record a charge of approximately $1.2 million of which approximately $700,000 will be recorded in fiscal year 2004. Of the total charge, approximately $900,000 will be cash costs.

 

 

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