Pfleiderer's Move To North Carolina Will Cut Costs

Moncure, NC, Aug. 6, 2008--The relocation of Pfleiderer's Uniboard HDF production from La Baie in Canada to Moncure will streamline laminate production and cut costs.

Pfleider bought a particleboard plant from competitor ATC Panel in Moncure. With the closure of the unprofitable plant in Canada and investment of approximately $123 million at the U.S. site, Pfleiderer is creating the right conditions to become a cost leader also in the production of laminate flooring in North America.

“Pfleiderer AG is already the market leader for laminate flooring in the North America region. With this strategic step, we will now also achieve cost leadership and will thus emerge strengthened from the market crisis,” said Hans H. Overdiek, CEO of Pfleiderer AG.

Pfleiderer will be able to benefit from substantial synergy effects at the new site in Moncure. Just 30 miles away in Raleigh, the Pfleiderer subsidiary Pergo Flooring produces laminate flooring from high-density fiberboard (HDF). So from the plant in Moncure, Uniboard will be able to directly supply its associated company with the base material for its product, while Pergo Flooring will profit from lower transport costs and improved reliability of supply.

Another advantage of the plant relocation is the reduction in costs due to the favorable infrastructure for the wood industry in the area. Timber can be purchased at far less cost at the new location than at La Baie in Canada, and there is a glue supplier close to the new plant.

The Pfleiderer subsidiary will also profit from the fact that approval has already been granted for the expansion of production in Moncure to include HDF/MDF, so the relocation of the plant from La Baie to Moncure can be started without delay.

The start of the new HDF production line is planned for the third quarter of 2009. Pfleiderer will receive investment grants for the new production facility of $12 million from the state of North Carolina.

Another advantage is the elimination of the exchange-rate risk between Canada and the United States.