Home / News / Xerium completes $60mn restructuring of Chinese business

Xerium completes $60mn restructuring of Chinese business

24 Jul '15

4 min read

Xerium Technologies, a provider of industrial consumable products and services has completed the $60 million restructuring of its business in China.

A Xerium press release informed that the business is now in a position to locally serve customers in China, Asia and also export certain products globally.

The make-over of its China and Asian business has taken over 3 years to complete with a number of key aspects required for full implementation.

Xerium has implemented an all-Asian business model and will now run its entire Asian business from Shanghai.

Among the initiatives, Xerium completed a two-year multi-million dollar construction project to build and equip a brand-new press felt plant in Kunshan, China.

This greenfield plant is located in the heart of the Yangtze River paper-making region, which is at the centre of the largest paper-making region in the world.

“Xerium has significantly increased its competitive position with this plant and will now be able to more closely partner with customers in China and the rest of the world,” it said.

For the first time ever, customers in China will receive locally provided and optimised state-of-the-art press felt solutions from Xerium.

The Kunshan plant will be able to service the largest pulp, paper, paperboard, and tissue machines in the world, as the main machine in the plant is bigger than 15 metres wide and is also one of the largest of its type in the world.

Xerium also completed a two-year, multi-million dollar investment program to completely renovate its rolls and mechanical service plant in Changzhou, China.

Until this renovation was completed, Xerium had served this region for many decades by exporting high-end working rolls from Europe.

Xerium has now transferred all of its technology to this plant like Smart Roll production cell, spreader roll production cell, polyurethane production cell, suction box production cell, upgraded extrusion and drilling equipment.

Additionally, Xerium also set up a new Asia headquarter in Shanghai and moved it in to the Shanghai Free Trade Zone.

This special Chinese government approval allows Xerium to import and export at the lowest possible cost, expedite customs processing and provide shorter lead times for materials transfer.

It has also implemented a local capital structure and banking relationship by moving a portion of the Xerium corporate debt structure to China.

It has undertaken a multi-million RMB on-going loan in China with ICBC and will now conduct local business in local currency and finance and fund its China business locally also in local currency.

“This will also enable Xerium to both secure a natural business hedge and receive local entity tax treatment,” it explained.