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US electronic cable manufacturer Belden CDT (NYSE: BDC) plans to establish a new manufacturing facility in Nogales, Mexico, and to close two of its US plants by end-2007, the company said in a statement.
Belden will begin phasing out production during the third quarter of this year at its Tompkinsville, Kentucky and Fort Mill, South Carolina plants. Tompkinsville manufactures coaxial cable while Fort Mill makes twisted-pair data cable.
The manufacturer plans to outsource a portion of the production and move the greater part of operations to Nogales.
"We need a lower cost source for the products currently manufactured in Tompkinsville and Fort Mill in order for them to be more cost competitive and to meet our profitability objectives," Belden president and CEO John Stroup said.
"Establishing additional capacity in Mexico is an important step in our overall plan to increase our manufacturing presence in low-cost regions near our major markets," he added.
"We expect our capital investment in the new facility will be approximately US$30mn, and we plan to have it operating in the third quarter of 2007."
The plant will join Belden's two other plants in Mexico in Nogales and Tijuana.
According to the executive, "When completed, these changes among our North American manufacturing facilities are expected to contribute savings of approximately US$12mn per year, beginning late in 2007."