HELSINKI -- Elcoteq will restructure its operations, selling certain underperforming plants and improving its materials management in hopes of cutting $101.5 million to $116 million from its annual operating costs, the EMS firm said Thursday.
Among the steps Elcoteq said it will take include selling its Elcoteq Communications Technology GmbH subsidiary to Bavaria Industriekapital AG, and reducing or divesting its money-losing plant in St. Petersburg, Russia, during the early part of 2008.

"In the long term we believe in the Russian market, (but) we are aiming to cut the losses, we have lost enough money there," CEO Jouni Hartikainen told Reuters.

Elcoteq will take a one-time charge of $22 million tied to the newly announced measures, most of it in the fourth quarter.

The moves are undertaken in hopes of reaching a 2% operating profit margin in 2008. Reuters Estimates says the analysts' average forecast operating profit margin is 0.9% in 2008 and 1.1% in 2009.

Elcoteq said it would acheive the target through better materials management and asset utilization.

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