Pump manufacturer Concentric AB will lay off 34 staff as part of its plan to restructure its new manufacturing unit in Chivilcoy, Argentina, in the wake of drooping demand in commercial vehicle market in South America.
The entire one-off expenses estimated for the restructuring plan stands at MSEK 14 in Concentric Chivilcoy, totaling to $1.6m.
A part of the job cut has already been initiated and the rest would be executed in July through voluntary and compulsory redundancies.
The redundancy drive, set to translate into annual savings worth $1.04m, is expected to give parity to Concentric Chivilcoy's margins with the rest of the group, the company said in a statement.
Concentric AB makes technology oil pumps, water pumps, fuel pumps and hydraulic systems.
The company had gained foothold in South American commercial vehicle market through the purchase of GKN Sinter Metals de Argentina earlier this year. It has also consolidated its position in Mercosur trade union.
Concentric has also projected $1.7m worth income from negative goodwill as the fair value of the net assets acquired with GKN Pumps exceeding the purchase price, according to the company's Q1 2015 interim report.
GKN Pumps, which the company has dubbed unprofitable, has led the seller approach Concentric for a strategic exit from the pump manufacturing. This prompted Concentric to agree a favorable purchase price, backed by the redundancies at Chivilcoy facility.
