A comprehensive plan encompassing commercial, operational and efficiency initiatives has been established, to accelerate the turnaround of its Brazil business and in order to achieve ongoing sustainable profitable growth. As part of this plan, Ontex Brazil will transfer its manufacturing operation in Aparecida de Goiânia to its manufacturing site in Senador Canedo, both in the State of Goiás. This will result in a non-recurring pre-tax charge in 2018 of up to €30 million, of which approximately €10 million will be a cash cost. This is expected to result in annualized recurring EBIT savings of €7 million.
This move was made after an in-depth analysis and considering the efficiency of combining the entire production into a single unit, where it will be possible to deploy efficient technologies and processes. All alternatives were investigated to minimize impact on Ontex employees in Aparecida de Goiânia, the majority of whom will transfer to Senador Canedo. The change will occur through the third quarter of 2018, at which time the Aparecida de Goiânia plant will become inactive.
The company's commitment to Brazil and its growth ambition remain unchanged; this includes the continuation of ongoing investments in research and development, health and safety, and modern technologies in the state of Goiás and Brazil to ensure future growth.