Fisher & Paykel Consolidates Manufacturing in Mexico Apr 18, 2008

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Fisher & Paykel Appliances will expand manufacturing in North America through the consolidation of its plants in New Zealand, Australia, and Orange County, CA, U.S., to a facility in Reynosa, Mexico.

F&P is acquiring the 60.3-acre (32,600-sq-ft) Reynosa plant from Whirlpool Corp. The plant was home to Whirlpool's side-by-side refrigerator production. As APPLIANCE magazine reported on Feb. 1, Whirlpool is moving side-by-side production to its existing plant in Ramos Arizpe, Mexico.

F&P will modify the plant to produce its own side-by-side refrigerators for the North American market starting in July 2008. It also plans to put its new North American DishDrawer production line in the facility by the end of 2008.

F&P's range and DishDrawer factory in Dunedin, New Zealand, its refrigeration plant in Brisbane, Australia, and DCS manufacturing in Huntington Beach, CA, will be relocated to Reynosa in the next 12-18 months.

Each DCS manufacturing line will be shifted separately to reduce the impact on warehouse inventory and all moves are planned for completion by the end of 2008. The U.S. operation will continue to employ sales and marketing, customer services, the head office, and an engineering staff of around 340 employees. The financial benefit of the DCS move is expected to be $6.6 million per year with a one-off cost of $7 million, both at pre-tax level.

"This expansion is designed to streamline our manufacturing costs, and bring increased consistency and efficiency to the company’s production process in the U.S. market," said Mike Goadby, North American President for Fisher & Paykel Appliances. "It’s an emotional time for all of us, but this move will make us more competitive in the U.S. and strengthen our distribution efforts through making them more efficient."

The financial benefits of the new strategy, including the Reynosa acquisition and the new North American DishDrawer line announced last year, are expected at around $50 million per year, at a one off cost of approximately $100 million. The cost of the move will be offset by the sale of surplus property in Australia and New Zealand, which could total approximately $100 million.
 

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