South Korean Subsidiary
South Korean subsidiary of a global manufacturing company. With 8 manufacturing facilities spread over the country and a customer base delocalizing production abroad, the company faced a challenging question of under-utilization of its assets. Each facility was bearing relatively high fixed costs. Choices had to be made within the business portfolio as to (i) make or buy, (ii) which facilities would need to be closed and which would benefit most from the transferred business.
CEOACH consultant led the decision process of evaluating the best timing for transfer of business (in view of long term contract re-negotiations), the cost/benefit analysis of the closures, and the control/quality trade-off of proposed buy vs. make decisions. From start-to-completion, 18 months of active involvement resulted in a 4 point EBITDA improvement, a greatly improved footprint (closure of 2 facilities) and the sale of non core assets enabling a debt reduction of 30%.