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Quebecor - More Facilities Targeted for Consolidation

February 2000
MONTREAL—The first stage of "restructuring," as Quebecor integrates its operations with the former World Color operation, is complete. But the process is far from over, and it will cost Quebecor more than the company first projected.

Quebecor officials say prepress operations in Denver and Orlando, and World Color plants in Lake Mary, FL, and Orlando, have already been consolidated, while the redeployment of equipment from its San Jose, CA, plant is currently under way. Officials say that other so far unspecified facilities have been identified for integration over the next 18 months.

"The synergies between the Quebecor Printing and World Color operations are significantly better than originally anticipated," notes Charles G. Cavell, president and CEO of Quebecor World, the combined entity. "However, in order to achieve these additional benefits, a significant restructuring of our manufacturing facilities in the United States is required."

Quebecor World initially projected that the total cost of integrating the two operations would be approximately $100 million, but that the restructuring would save the combined company in excess of $50 million annually. Quebecor now says it expects annualized cost savings in excess of $100 million, and now indicates it will spend US$125 million to bring them about.

"Market leadership is not merely a matter of size but, most importantly, taking advantage of our size to improve our business," Cavell continues. "The restructuring will provide for fewer but larger plants and, therefore, less administrative cost and better economies of scale; increased plant specialization that allows for greater efficiency; and improved distribution, which reduces the final cost to our customers and also improves speed of delivery to the end users of the print product. As the world's largest commercial printer, we have the obligation to provide the highest level of service to our customers."

While acknowledging that one goal of the restructuring is to reduce the number of employees at the company, "where possible, employee transfer, attrition and early retirements will be used to mitigate the impact on our personnel. We will treat affected employees with respect and fairness as we have historically," contends Cavell.

"A strategy for evolution has been established. A plan is now in place to realize the strategy. The Product Group Presidents are committed to the realization of the plan," Cavell says.
 

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