Frigoglass to abandon South Carolina plant

Frigoglass announced it will discontinue manufacturing at its facility in South Carolina by the end of the first quarter, but will retain its presence in North America through commercial activities of sales and marketing, distribution and servicing.
Frigoglass will also provide an update on the expected annualised cost savings and related restructuring charges at the time of announcement of the 4Q13 results.
“This decision is in line with the management’s strategy to address loss-making operations in the group, including US operations, examining various options,” explained Vassilis Roumantzis, analyst at the Investment Bank of Greece.
He said that 9M13 sales in North America represented only 5% of total cool division sales, standing at EUR 15 mln.
“We believe the short-term impact will be limited as cash outflows related to restructuring charges will probably be offset by asset sales and manufacturing reorganisation in the group to meet demand in North America,” Roumantzis added.
“We view the decision as a positive step, as it will allow the company to limit losses in the current challenging environment and focus on profitable markets. Having said that, we retain our cautious view for the stock as the continuation of pressures in emerging markets could weigh more than expected on company’s performance in 2014,” the IBG analyst concluded.