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Profitability plan closes Ontario, Texas plants
Published on Thursday, Feb 07, 2008
Beacon Journal staff report
A. Schulman Inc.'s 100-day plan to improve the company's finances includes getting rid of one-third of its current North American factories.
The Fairlawn polymer company said late Wednesday it will shut down a factory in St. Thomas, Ontario, and sell its Orange, Texas, facility. The company said the moves will enable it to consolidate production and improve capacity utilization, while also exiting low-margin businesses.
''These steps confirm our commitment to do what is necessary to restore our North American operations to long-term profitability and steady growth,'' Joe Gingo, Schulman's new chief executive officer, said in a statement. Gingo, a former
Goodyear executive, started his new job on Jan. 1, and on Jan. 3 announced a 100-day plan to improve A. Schulman's profitability.
The 120 employees at the St. Thomas plant can produce as much as 74 million pounds of engineered plastics annually for the automotive market, the company said.
Schulman said it expects to save $6 million to $7 million in fiscal 2009 and an estimated $9 million to $10 million annually in fiscal 2010 by closing the factory.
The shutdown is expected to be complete by the end of the first quarter of fiscal 2009.
The Texas plant primarily provides what the company called third-party ''tolling services.'' Schulman said company executives decided to exit the tolling business to concentrate on higher value-added products.
The company expects to take charges of between $10 million and $15 million for the closure and sale of the two plants.
Schulman will then have four North American plants with a fifth due by the end of the year. The new factory will make packaging market products in Findlay, Ohio, by December.
Get the full article here.
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