Shermag closes BR plant in move to boost profits
Michael J. Knell -- Furniture Today, March 20, 2005
Cotstown, Quebec — Shermag has permanently closed its bedroom and juvenile factory here, part of a restructuring effort to reverse the severe drop in the full-line producer's profitability.
The closure will mean job losses for 84 workers, 37 of whom were laid off in January. Early last month, Shermag cut the workforce at its plant in Victoriaville, Quebec, in half, laying off another 80 workers.
The company also said that in a bid to reduce excess inventories, it will cut back production at its Lennoxville facility for the time being.
President and CEO Jeff Casselman said the measures are in line with the previously announced internal review of operations, headed by Luc Quirion, Shermag's new vice president of restructuring.
"We believe this difficult but necessary process will create a more efficient and more customer-oriented organization in the face of the appreciation of the Canadian dollar and competition from Asian-based manufacturers," Casselman said. "We have committed to reduce existing excessive inventory levels by the end of the first quarter of next year. This action, along with the capacity reduction initiative announced mid-February at the HPL Division in Victoriaville, will help ensure that the reduction is achieved."
The full financial impact of the Scotstown closure won't be known until the review of operations is completed as it will, among other things, identify which equipment can be utilized elsewhere.
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Shermag closes Scotstown plant
Mar 11, 2005
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