A Schulman to close US engineered plastics plant
Citing an uncertain economy, A Schulman plans to close its engineered plastics plant in Nashville, Tennessee, and consolidate manufacturing to its remaining North American manufacturing sites, the US-based compounder said on Thursday.
"We have taken several actions over the past few years to replicate our profitable European engineered plastics business model in North America by eliminating US commodity capacity and shifting our focus to more profitable technical compounds," said Joseph M. Gingo, CEO.
"This latest step further consolidates the remaining US capacity to our Ohio plants. We will also realign staff support to better reflect the new business model,” he added.
As a result of the realignment, four production lines at the Nashville facility will be shut down and approximately 60 jobs will be eliminated, including jobs from the Nashville facility and support staff functions.
Approximately 24 million pounds of engineered plastics production will be moved from Nashville to production lines in the company's Akron and Bellevue, Ohio, facilities.
The Akron plant's state-of-the-art capabilities will be enhanced to produce highly technical and higher-value specialty compounds for the North American market in a flexible and lean manufacturing facility, Schulman said.
As part of this effort, Schulman anticipates investing approximately $7 million to create technical compounding capabilities in the Akron facility. This move will add approximately 20 jobs.
The Nashville facility is expected to close no later than February 29, 2012, the end of the company's fiscal 2012 second quarter. Construction in Akron is expected to begin next month, with operations to commence by early March 2012.
“While it's never easy to take such actions, we're seeing uncertainty in the economy and flat demand as we look out into fiscal 2012 and believe these proactive steps are prudent at this time,” Gingo said.
As a result of this action, Schulman said it anticipates a total annual pre-tax benefit of approximately $4 million to $5 million, which will be realized after the current fiscal year ending August 31, 2011, once operations are discontinued at the Nashville facility.
Comments