GRAND RAPIDS, Minnesota — ASV Holdings, Inc., a provider of rubber-tracked compact track loaders and wheeled skid steer loaders in the compact construction equipment market, will establish a new parts distribution centre adjacent to its corporate headquarters and manufacturing plant in Grand Rapids, Minnesota.
The new facility is expected to enable the Company to more effectively manage aftermarket parts distribution to its dealer network, and will also result in meaningful yearly operating cost savings beginning in 2018. The transition of these operations to Grand Rapids is expected to be completed during the second quarter of 2018.
“We continue to take steps to manage our growth as a public company, and rebuild the ASV brand as an independent entity. In recent years, our parts distribution was outsourced and we believe that moving back to Grand Rapids will allow us to provide the level of customer service expected of a quality brand,” Andrew Rooke, CEO of ASV commented.
“In addition, we expect to achieve significant cost savings with this project from operational synergies that will contribute to achieving our targets for margin improvement. This is another significant step in the reestablishment of the ASV brand as a quality leader in the compact track loader business.”
A key factor in the relocation decision was that as a result of bringing increased employment and economic activity to its areaof Minnesota, the company has been approved to qualify for Minnesota State funds and assistance totaling approximately $450,000. This comprises financing at zero or low interest rates and includes partial forgiveness after a qualifying period. The net cash cost to the company is expected to be approximately 60 percent of the costs of establishing this new facility.
Jim DiBiagio, COO of ASV commented, “We were very pleased to receive the support of local and state representatives with whom we worked during the state grant approval process, which created the opportunity to locate our parts distribution to Grand Rapids. After the relocation process, not only do we anticipate improving the speed and quality of parts support for our customers but we expect to be able to do so at a lower operating cost to the Company from the synergies of consolidating in one location with unified systems.”
The company expects to record expenses of approximately $250,000 in the fourth quarter of 2017 related to the establishment of the new distribution centre.