Kitron ASA Establishes Distribution Center

Kitron ASA announced that it has decided to establish a distribution centre to streamline the logistics process and drive down inventory. Combined with other initiatives within logistics and supply chain process, the Company is targeting to reduce inventory by at least NOK 100 million from the current level. A portion of the working capital is tied up in inventory. Inventory represents approximately 30% of the total assets in the Company, and was NOK 377.1 million at June 30, 2012. The establishment of a distribution centre is also expected to lead to operational improvements and cost savings. Larger order quantities and fewer interfaces between the Company and its suppliers will reduce the workload related to order processing. The inbound material and components will also be optimized for Kitron's manufacturing process, which will lead to increased productivity and less waste. The investment required to establish a distribution centre in Lithuania at the factory in Kaunas is estimated to about NOK 10 million. The investment will partly be funded by the Lithuanian government. The plan is to have the distribution centre fully operational by the end of 2013.