Pfleiderer AG aims to achieve cost leadership in North America with new plant in Moncure

Uniboard, a subsidiary of the MDAX-listed Pfleiderer Aktiengesellschaft (ISIN DE0006764749), is to relocate its HDF production from La Baie in Canada to Moncure in North Carolina, USA, where it has bought a particleboard plant from competitor ATC Panel. With the closure of the unprofitable plant in Canada and investment of approximately €80 million at the US site, Pfleiderer – the premier producer of engineered wood – is creating the right conditions to become the cost leader also in the production of laminate flooring in North America.

“Pfleiderer AG is already the market leader for laminate flooring in the North America region. With this strategic step, we will now also achieve cost leadership and will thus emerge strengthened from the market crisis,” explained Hans H. Overdiek, CEO of Pfleiderer AG.

Pfleiderer AG will be able to benefit from substantial synergy effects at the new site in Moncure. Just 50 kilometers away in Raleigh, the Pfleiderer subsidiary Pergo Flooring produces laminate flooring from high-density fiberboard (HDF). So from the plant in Moncure, Uniboard will be able to directly supply its associated company with the base material for its product, while Pergo Flooring will profit from lower transport costs and improved reliability of supply.

Another advantage of the plant relocation is the reduction in costs due to the favorable infrastructure for the wood industry in the area. Timber can be purchased significantly less expensively at the new location than at La Baie in Canada, and there is a glue supplier close to the new plant.

The Pfleiderer subsidiary will also profit from the fact that approval has already been granted for the expansion of production in Moncure to include HDF/MDF, so the reloca-tion of the plant from La Baie to Moncure can be started without delay. The start of the new HDF production line is planned for the third quarter of 2009. This means that the new production capacity will be available in good time for the market upswing, which is generally anticipated for the end of 2009. Pfleiderer AG will receive investment grants for the new production facility of US$12 million from the state of North Carolina.

With the acquisition of the ATC particleboard plant and the new development of an MDF/HDF plant in Moncure, Pfleiderer AG will have its own production lines for both particleboard and MDF/HDF in the United States. This will allow the Group to directly supply customers in the main markets of the USA in the south and mid-west at com-petitive conditions. Another advantage is the elimination of the exchange-rate risk be-tween Canada and the United States.

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