VILNIUS - Vilniaus Vingis, the struggling manufacturer of TV deflection yokes, has announced it was establishing two production subsidiaries as part of a drive to boost efficiency.
The two subsidiaries will perform the functions of three of the company's current divisions. Both will be wholly owned by the parent company, and operations are due to start on Jan. 1, 2006.
"We are diversifying our production. We will work in the directions where we are stronger and where we can achieve more efficiency by spinning off assets to give them more autonomy," said CEO Vaclovas Sleinota.
One subsidiary, Vilniaus Vingio Gija, will focus on molding plastic parts and electroplating operations, while the other, Vilniaus Vingio Mechanika, will design and manufacture tools and equipment.
He did not specify which assets would be transferred to the new companies.
Vilniaus Vingis posted losses of 1.4 million litas (430,000 euros) for the first half of the year, compared with earnings of 4.3 million during the same period the previous year. First-half sales slumped by 32.2 percent year-on-year to 47.2 million litas.
The company lost one of its customers, LG Philips, after the latter closed its plant in England over the summer.
CFO Darius Oziunas said the losses resulted from a slump in sales and an overall sagging market. However, the company is optimistic after a strong showing at a recent international electronics show in Berlin.
In July, the company closed its assembly line for the summer break as part of its cost-cutting measures.