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KBA North America restructuring nearing completion

Press release from the issuing company

Dec 18 2006 -- Following an announcement by KBA North America at Graphexpo in mid-October to the effect that all web press sales, service and parts activities are to be transferred from York, Pennsylvania, to its sheetfed division in Williston, Vermont, KBA NA has now announced that the integration will be completed by the end of the year. In addition to merging its sheetfed and web press activities the wholly owned US subsidiary of Koenig & Bauer AG in Germany is to open a parts and service centre near Dallas/Fort Worth International Airport, Texas, in mid-January 2007. KBA North America already runs service outlets on the East and West Coast and in the Midwest. A newly formed consumables division will ensure the timely provision of consumables to KBA customers. In its December 8 session, KBA North America's supervisory board voted to close down the York plant by June 30, 2007. While North America is one of KBA's biggest markets, changes in the market environment have forced the closure of what is the last remaining US production plant owned by a foreign press manufacturer, following a string of closures in the US by both American and European press manufacturers in recent years. At present the York facility employs 52 people. KBA North America Inc., Web Press Division, evolved from US flexo press manufacturer Motter Printing Press Company, which was acquired by KBA in 1991. When offset superseded flexo the York facility started building subassemblies for the parent company. However, many newspaper customers preferred to have their presses built in Germany, where productivity levels were also higher. Production was therefore transferred back to Germany and the York plant downsized. Alongside its high-growth sheetfed business KBA also has a large installed base of newspaper, commercial and gravure presses in the USA and Canada. With sales of several hundred million dollars per year, North America generates on average 15 to 20% of KBA's total sales, which in 2006 exceeded Ä1.7 billion ($US2.2bn) for the first time. North American users of KBA presses will benefit from a centralised provider with over 150 highly trained staff, and from an expanded sales and service network.