As a key part of its global manufacturing strategy announced on April 18, Fisher & Paykel Appliances is expanding its manufacturing in the U.S. market through consolidating manufacturing plants located in New Zealand, Australia and Orange County, California, to one North American facility.
The company announced this week that it had acquired land and buildings and a refrigeration plant located in Reynosa, Mexico.
The range and DishDrawer factory in Dunedin, New Zealand, the refrigeration plant in Brisbane, Australia, and the DCS manufacturing plant in Huntington Beach, Calif., will be relocated to the new facility in the next 12 to 18 months. The DCS move is expected to be completed by the end of the year, and individual manufacturing lines will be shifted separately to reduce the impact on warehouse inventory. The U.S. operation will continue to employ sales and marketing, customer services, 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.”
With the Reynosa acquisition and the new North American DishDrawer line announced last year, the financial benefits of the new strategy are expected to be 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.
Fisher & Paykel has long been recognized in New Zealand as a technology and design leader in the home appliance industry. Similar recognition in the U.S. market has come to Fisher & Paykel in the past few years through the introduction of its innovative DishDrawer Dishwasher, EcoSmart washer, CoolDrawer refrigerator and CookSurface cooktop that offer distinctive “European” style design combined with cost-saving environmentally friendly features. Growing interest among U.S. consumers for stylish, yet green and energy-efficient home appliances have bode well for the company’s growth prospects.
The refrigeration plant, which was purchased from the Whirlpool Corporation, will be modified to manufacture side-by-side refrigerators for the North American market under the Fisher & Paykel name starting in July 2008. Fisher & Paykel also plans to establish their new North American DishDrawer production line at the 60.3-acre (32,600-square-foot) facility later this year
Goadby added that this move once again demonstrates the company’s commitment to its North American customers through expanded manufacturing and product range to meet the growing demand for Fisher & Paykel Appliances.
