LUND, Sweden — Alfa Laval has announced a restructuring program that will include three initiatives: create a leaner organization, separate some product groups, and restructure the manufacturing footprint.

“We must adjust the size of our organization to existing market conditions,” said Tom Erixon, president and CEO of the Alfa Laval Group. “However, before launching any short-term initiatives, we wanted to be perfectly clear about the long-term direction of the company.”

The company said the new strategic direction is a long-term commitment for Alfa Laval, with the objective to support organic growth. It also includes efforts to manage the short-term challenges caused by weaknesses in certain end markets.

The new structure, with adjustments to prevailing market conditions, will lead to a leaner organization. This part of the program is expected to largely be implemented by the end of the second quarter of 2017.

A few product groups also will be separated in the new organizational structure. Alfa Laval’s strategic review identified three product groups in need of special attention: commercial/industrial air heat exchangers, commercial tubular heat exchangers, and heat exchanger systems. These units will be included in an initiative called “Greenhouse,” which will be managed separately from the new divisional structure. The aim is to provide these units with the best possible conditions to improve performance and develop the activities in a focused manner.

The third area is the stepwise implementation of a leaner and more competitive manufacturing footprint. This initiative will gradually be implemented over several years, starting in 2017 and completed by the end of 2019. Further information about the footprint initiative will be presented gradually.

The company expects these initiatives to generate considerable savings. Savings relating to sales and administration costs are estimated to reach approximately SEK 300 million.

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Publication date: 11/22/2016

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