Semperit A.G. has taken steps to immediately shut down a 120-employee production site for conveyor belts in Shandong, China.
The decision, Semperit said in a statement, is part of an on-going restructuring effort.
"In the course of this, it was noted that other production sites in perspective show higher margins," Martin Fuellenbach, chairman of the management board of Semperit, said in a statement. "Moreover, the shutdown of the plant is intended to contribute to reducing complexity on group level."
Last year, Semperit said, the site generated about $16.2 million in revenue. The firm expects the plant's closure to have an $11.5 million impact on the group's earnings (EBIT) in 2018, including impairments and other valuation allowances in addition to provisions.Meanwhile, Semperit said it is taking "appropriate social measures" to support those employees impacted by the plant's closure.
The plant, Best (ShanDong) Belting Co. Ltd., was founded in 2010 as part of a joint venture with the state-owned energy company Wang Chao Coal & Electricity Group. Since it began operation, the plant has served China's domestic and export markets.
Wang Chao Coal & Electricity, Semperit said, holds a 16.1 percent stake in the plant.
