PCB | August 20, 2007
Aspocomp CEO clarificates the current situation
Finland based Printed Circuit Board maker Aspocomp Oyj is actively continuing partnership and financing negotiations. In a letter to it's share holders Aspocomp CEO Maija-Liisa Friman clarificates the current financial situation the company is going through.
In the letter Aspocomp's CEO Maija-Liisa Friman said the following: “The first half of the year was a challenging period in the PCB market due to the overstocked global sales channels. In addition, certain products at the Salo plant were terminated and subsequent to the minority share acquisition in China, the Suzhou plant underwent a significant transition period. The Salo plant was closed down in July. The major overhauls have now been completed and there are signs of an improvement. The Group's cash flow from operations is starting to turn and we expect it to improve in the third quarter of the year. Closing down the Salo plant is expected to yield annual savings in excess of EUR 10 million and reduce loss before non-recurring items by about EUR 3 million. After a weaker start of the year, the transition period following the minority share purchase in the Chinese subsidiary was completed. Experienced Chinese management has replaced the Taiwanese and the unit has been integrated into the Group. The benefits of the operational takeover will be visible starting the third quarter and come into full effect in the fourth quarter of the year. We are now well-poised for taking full advantage of the growing market. Lower technology products from Thailand have been under heavy price pressure this year, which has affected the sales volumes. Actions taken to improve the plant's operative performance, including labor cost cuts and better control of raw material usage, have started to bear fruit. The Oulu plant, in contrast, continues to excel. The decision of the French Supreme Court on June 19, 2007, was the least expected outcome. According to the decision, Aspocomp has to pay EUR 10.1 million plus interest to the former employees of Aspocomp S.A.S. The related counter obligation of Aspocomp to Nordea has been converted into a bank loan; therefore, the decision will not essentially weaken Aspocomp's immediate liquidity. In order to better serve our globally growing customers, we are actively continuing partnership and financing negotiations. A partnership enables our growth in Asia and helps finance our planned investment program. The possible choice for strategic partnership will also affect the timing of investments and plant start-up in India. Aspocomp's volume production is now located entirely in Asia. The closing down of the Salo plant went well. Consequently, we expect to see a better performance starting from the third quarter of the year." Aspocomp Group Oyj said in a statement it's board member Tapio Hintikka has given a notice of resignation from Aspocomp's board on August 20.