CVTech Group Inc. (TSE:CVT), a construction and maintenance services provider, said it's adopting a new organizational structure that will increase operating efficiency and substantially reduce operating costs.
The Drummondville, Quebec-based company said in a statement today that the new business model will accelerate growth, strengthen market position and reduce costs by more than $2 million.
CVTech, which started an internal strategic review last Ocotber, said it will now adopt a simplified organizational structure allowing CVTech to evolve from a business model resembling that of a holding company to a model based on fully integrated subsidiaries.
Under this structure, operations will be regrouped by geographic region and the first step will consist in merging Thirau LLC and U.S. operations under the unified banner of Riggs Distler & Co. Inc.
CVTech named Steve Zemaitatis Jr. as Executive Vice-President in charge of U.S. operations and President of Riggs Distler to carry out the reorganization in the United States.
Zemaitatis has been with Riggs Distler since 1998, joining CVTech in 2009 when the latter acquired Riggs Distler.
"CVTech's presence in the United States has grown substantially in recent years and the adoption of this business model will leverage the high-profile Riggs Distler brand to further enhance its position in the market for services to the energy industry," Zemaitatis said.
"The reorganization will also make our U.S. operations more efficient and bring it a lasting competitive advantage," he added.
The new business model also entails the creation of shared administrative services, the introduction of new lines of business and access to more diversified expertise. The company estimates that these initiatives will bring efficiency gains resulting in recurrent annual cost savings.
In Canada, the strategic review with regard to implementing the new Canadian business model is ongoing under the leadership of Bruno Testaert, Vice-President and General Manager of Thirau ltée and JJL Déboisement Inc. Testaert was appointed last October.
Shares of CVTech were unchanged at 87 Canadian cents at 1:46 p.m.in Toronto.