Optelecom-NKF Transfers U.S.-Based Manufacturing Overseas
GERMANTOWN, Md.
Optelecom-NKF Inc., a provider of IP video surveillance solutions, has completed the consolidation of its U.S. manufacturing operations into its existing production facility in the Netherlands.
Shuttering its U.S. manufacturing operation is part of a series of restructuring initiatives Optelecom announced in April that are designed to strengthen the company’s financial and operational framework.
In May, Optelecom reported is first quarter revenue was $7.2 million, a decrease of 17 percent compared to the same period in 2009. The company attributed its sales losses in the U.S. and abroad to the economic downturn, which has caused some businesses and governments to defer or cancel purchases.
Currently, more than 70 percent of Optelecom’s total revenue is generated outside the U.S., although the U.S. market accounts for a large majority of the company’s losses.
Transferring U.S.-based manufacturing to the Netherlands, coupled with large staff reductions, is expected to increase operational efficiency and should generate annualized savings of about $2 million in 2011, with partial savings expected this year, according to the company.
“Our cost structure had to be optimized to enable the company to be profitable at reduced revenue levels, while we concentrate on improving U.S. sales performance,” says Dave Patterson, Optelecom president and CEO. “This new structure significantly lowers our fixed costs, while enabling our U.S. sales teams to address the unique needs of their respective industry sectors.”
Patterson says the company’s U.S. sales force will now focus on three market sectors: transportation, government and critical infrastructure. Each sector will be supported by sales directors, industry solutions managers and solutions architects. Customer service operations in the U.S. will continue to be based at Optelecom’s Germantown, Md., global headquarters.
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