By: Frank Esposito
February 21, 2013
THE WOODLANDS, TEXAS -- Changes at Huntsman Corp.'s Advanced Materials unit will result in job cuts at its two major global epoxy resin plants, but won't affect an ongoing expansion at the firm's epoxy plant in Alabama.
Huntsman – based in The Woodlands, Texas – now employs 350 at its epoxy plant in McIntosh, Ala., and another 330 at a similar plant in Monthey, Switzerland. After the cuts, each site will still employ more than 300, spokesman Wynne Norris said in a Feb. 21 phone interview.
"We're making what we have function more efficiently," Norris said. "There's going to be some fixed cost reduction…as we deal with pockets of undercapacity."
In a recent news release, Huntsman officials said the global program is needed because of "weak economic conditions in key global markets, combined with rising fixed costs and continued volatility in the cost of raw materials." Annual business benefits from the changes are expected to be around $70 million.
The program "is designed to ensure that the Advanced Materials business is strongly positioned to compete successfully in a changing marketplace," division president James Huntsman said in the release.
The epoxy-related cuts won't affect a $50 million expansion of the McIntosh plant, Norris said by phone. That project is expected to enhance the plant's ability to make purified epoxy resins and is expected to be complete by early 2015. A similar project doubled the capacity of the Monthey plant, but a capacity increase estimate for McIntosh was unavailable.
Demand for multifunctional epoxies to replace aluminum and other materials in aerospace and similar markets is driving the expansions, officials said. In addition to epoxies, Huntsman's Advanced Materials unit makes a wide range of specialty polymers and synthetic resins.
Huntsman's Polyurethane unit is unaffected by the changes being made in Advanced Materials, Norris said. The firm's plastic-related businesses saw mixed results in 2012, with Polyurethane improving and Advanced Materials declining.
Advanced Materials struggled in 2012, with sales dropping 3 percent to about $1.3 billion and pretax profit slipping 17 percent to $92 million. But Huntsman's PU unit saw a 2012 sales gain of more than 10 percent to almost $4.9 billion, while pretax profit soared more than 60 percent to $772 million.
Total corporate sales for Huntsman were flat at about $11.2 billion in 2012. But the firm saw its full-year profit jump almost 47 percent to $373 million.