PureTec Corp. has hired a financial advisor to counsel the company on the future of its primary operating subsidiary, Plastic Specialties and Technologies.
Ridgefield, N.J.-based PureTec retained Schroder Wertheim & Co. Inc. of New York ``to advise management on a number of strategic issues,'' PureTec said May 12.
Spokesman William Walkowiak said that although selling PS&T is a remote option, PureTec will investigate the ``full spectrum of possibilities.'' PureTec officials think the firm is undervalued, he added, and part of that may be due to the firm's diversified structure.
PS&T employs 1,600 in PVC compounding, tubing extrusion and plastics recycling units. Its operations include Colorite Polymers, Colorite Plastics, Action Technology and Pure Tech Plastics.
``With complicated ownership and management structures, we hope to cut through some of the complexities and reduce expenses,'' Walkowiak said.
PureTec's restructuring extends to its Specialty Vinyl Resins division in Burlington, N.J., and includes a 10 percent cut in Burlington's work force of 150-160 people. The firm expects to slash annualized expenses by about $750,000.
``Our Burlington operation produces excellent, high-quality resins,'' said Fred Broling, PureTec chairman and chief executive officer. ``We have developed a strategy to maintain this quality while reducing overhead costs. This includes both a restructuring of administrative functions and improved operational efficiencies.''
PureTec produces plastic products in four markets: home and garden products, medical plastics, packaging components and specialty materials. Walkowiak said each market has unique customers and operating environments and, therefore, may have different restructuring strategies.
For example, while Burlington is cutting back expenses, the medical segment is focused on growth with a new plant in Belfast, Northern Ireland, and an expansion at its Sparks, Nev., location.
For its second quarter, ended Jan. 31, PureTec reported a loss of $3.2 million vs. a loss of $4.5 million for the same year-ago period. Sales were $66.4 million, down 9.2 percent from $73.1 million in 1996. The firm had sales of $345 million last year.