QUEBEC (AP) — Sigma Industries Inc., a Quebec-based maker of composite and metal products, has streamlined its operations to cut costs and settled with its insurance company for $4.1 million as final payment for a 2005 fire at one of its subsidiaries.
The company said Thursday it is merging its Quebec metal component manufacturing plants into one operation at the PNS-Tech Inc. unit in St-Agapit, Que. As part of the streamlining, the company has agreed to sell the building and equipment at the defunct L'Islet plant for about $400,000 and will use the money for working capital.
Meanwhile, Sigma said it has received $4.1 million as a final insurance settlement from a fire that damaged its Rene Composites Materials plant in St-Ephrem-de-Beauce in 2005.
Combined with earlier payments, the company has received $13.1 million from the insurer and will book a net gain of about $1 million on its books for the quarter ended Jan. 26.
''This cash receipt further strengthens our balance sheet,'' said Bertrand Cote, Sigma's chief financial officer. ''We intend to use proceeds to reduce our bank debt, which should give us greater flexibility in pursuing our growth objectives through acquisitions.''
In another development, the company said it has created a wholly owned U.S. subsidiary called Sigma US Industries Inc. to grow the Quebec company's business in its key United States market.
''This new entity will be a key element in achieving our growth objectives,'' said president and CEO Denis Bertrand.
''In fact, we are actively pursuing our efforts to acquire companies involved in our existing markets and susceptible of broadening our technological and client portfolios. With roughly 70 percent of our sales in the United States, the necessity to further strengthen our relationships with our clients, through increased proximity of our respective facilities, and to better match up our cash inflow and outflow in foreign currency justifies our quest.''
Sigma has five operating subsidiaries and employs nearly 500 people, making products for the heavy-duty truck, coach, transit and bus, train and subway, machinery, agriculture, forestry and wind energy sectors.