Raw materials and equipment damaged
MONTREAL: A fire has destroyed Dorel Industries’ car seat assembly facility in Rio de Janeiro, Brazil, causing millions of dollars in damage.
The blaze erupted mid-morning on Nov. 17, 2010, but information on the blaze was only disseminated by the company a couple days later.
No injuries were reported from the fire, which the company believes was accidental.
The plant employs about 175 of the 275 people Dorel and its local partner have working for them in Brazil.
Some will be transferred to a nearby facility where work will gradually resume in about a week. The majority will be get vacation pay until production at a new site is fully ramped up in five or six weeks.
The destroyed inventory was mostly raw materials and some assembly equipment. The valuable car seat moulds and finished products were at another location.
“In terms of our overall operations it’s small,” spokesman Rick Leckner said in an interview.
Insurance fully covers the loss of supplies and the interruption to the business and the impact on Dorel’s results will not be “material,” he added.
In addition to shifting production to the location that houses its corporate offices, Dorel has lined up warehouse space.
Montreal-based Dorel entered the Brazilian market in January 2009 and has seen sales surge as a result of new legislation requiring the use of car seats in vehicles.
“Brazil is an excellent market for us and we are putting all of Dorel’s resources to work to fully support our customer base,” stated Hani Basile, head of the Juvenile Group.
Demand has exceeded the company’s expectations. Some of the car seats are made in Brazil, others are imported.
“We want to make sure that we don’t lose that momentum so they put a plan together very, very quickly,” Leckner added.
Established in 1962, Dorel is one of the world’s largest manufacturers of juvenile products such as infant car seats, and bicycles. It also makes ready-to-assemble furniture.
Its juvenile brands include Safety 1st, Quinny, Cosco and Maxi-Cosi, while it sells bikes under the Cannondale, Schwinn, GT, Mongoose and Iron Horse marks.
Dorel has US$2.14 billion in annual sales and 4,500 employees in 19 countries.
On the Toronto Stock Exchange, its shares were down five cents at $33.50 in afternoon trading Friday.