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KEMET Corporation (KEM)
Deutche Bank db AccessTechnology Conference Call
September 12, 2012 2:00 pm ET
Per-Olof Loof – Chief Executive Officer
William M. Lowe, Jr. – Executive Vice President and Chief Financial Officer
Sherri A. Scribner – Deutsche Bank Securities Inc.
Sherri A. Scribner – Deutsche Bank Securities Inc.
Previous Statements by KEM
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Okay, thank you. Thank you all, thank you for coming. Just a few, we've been given a pretty strict format here as to what we should be doing, so we have few slides and a few points that we are covering in, the rest we’re going to go through during the Q&A.
So, basically let me just cover some of the things that we've been working on and talking about over the last couple of years. And the one is of course the big reception after we've been doing primarily in Europe, over the last couple of years. And the major point here is that, within the next year this will be completed, and a lot of it is underway as we speak and if I go through it, just a little bit and some more color, we have a facility in Finland, and that facility will move into the paper business only, the rest will move elsewhere over the next year or so. And the facilities in the UK are in the process of being closed and that activity is even moving to Skopje and Macedonia or in Évora in Portugal. And also our facilities in Germany will also move into Skopje. The Skopje facility in Macedonia is actually a pretty good story, for us. We thought we should be able to get started there in about May next year timeframe.
We're actually going to inaugurate that facility in a month. So that facility is already up and running, and as we continue this next year we will move more of that in there. So over the next year this is well going to be finished. So, I think you'll be pleased to hear that that’s really on schedule and moving forward.
Also our facility in Italy and in the town of Pontecchio, which is going to be the one place instead of three we have now, and that is also on schedule, and that will be completed by the end of next summer. And that will allow us to move from three facilities in Italy to one, while those facilities are already shut in a time for Monghidoro, and the other two will move into Pontecchio over the next year or so.
So in a year, the Italian activity will be restructured as per the plan that we talked about couple of years ago and the activities that are either moving to Asia or to Skopje and some of the high margin stuffs will stay together, the engineering stuff will stay in Pontecchio in Italy. So the European restructuring efforts is now on its last leg and over the next year or so, it will be completed.
The next point I want to talk about is, effort to do vertical integration within our Tantalum business, and of course, for those of you who follow the company, you’re very well aware of the fact that we have gone through the process of ensuring that we can get material from Africa conflict-free and that process is now well underway. And the whole piece and if you look at this slide, you can see it how you start in the upper left corner and get them the material from the mining in Africa, and that will come those product to this KTaF, the solid looking material that we want to turn into powder in our facility here, actually north of Vegas near Carson City. And that will allow us to manufacture our own powder and control the supply chain totally.
And as we have said in other comments before, by December this year, we will be able to do about 80% of our own of our powder requirement to our own facility, and what we have also said publicly before and that still holds true that that will give us about $10 million benefit on a quarterly basis for that. And then we’re very pleased with how this whole thing is moving forward, the activities in Africa has really been going better than we had anticipated.
And also as our case, our ability to turn the minerals into KTaF or the salt material that is also gone better than anticipated. So we are very happy to see this whole thing moving forward.
As we have communicated and a little ahead of schedule than we previously had talked about. Also as you know as part of this process we have been very engaged in our social responsibility, particularly in this mining contingent and ensuring that we can provide a little bit of a better life for the people there. And you can see some pictures here of the clinics and the schools that we’re in the process of constructing and over the next month or so will be, I shouldn’t say fully operational, but I would say there will be operational to some extent. And you can see what the school has actually look like before and what the hospital looked like before and of course now, it’s a totally different picture for the people, a little bit of singling in northern (inaudible).