Web Date: July 29, 2008
PolyOne Will Close Eight Plants
Responding to high energy prices and low demand from the automotive and housing markets, polymer compounder PolyOne will close seven plants in North America and one in the U.K.
The Cleveland-based company states that the shutdowns will result in a net reduction of about 150 jobs. It plans to move manufacturing of affected products to a number of its more than 30 remaining plants, investing about $12 million in the production moves. PolyOne expects to incur one-time charges of about $31 million to account for the shutdowns and to generate future annual savings of $17 million.
Stephen D. Newlin, CEO of the $2.7 billion-per-year firm, says declining demand in markets such as housing and automotive "has created a timely opportunity to remove excess capacity and address supply-chain efficiencies." He says the shutdowns also reflect the firm's efforts to shift away from commodity products toward more specialized ones.
Polymer compounders such as PolyOne have found themselves caught between rising prices for plastics and other raw materials and resistance by customers to price increases. In March, competitor Spartech launched a restructuring that includes cutting 10% of its workforce, or about 350 jobs. A. Schulman, another leading compounder, recently hired an investment bank to help it explore options, including the sale of the company.
Still, PolyOne stated last month that it expects its second-quarter earnings before special items to show "modest improvement" over the same period a year ago.
- Chemical & Engineering News
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