Foam molder Tuscarora Inc. will close a few of its 37 plants, but it does not expect that plant consolidation to play a big part in its recently announced restructuring plan.
Tuscarora will close its Martinsville, Ind., expanded polystyrene molding facililty by the end of February because its major customer, Thomson Consumer Electronics, moved production to Ju rez, Mexico, said Brian Mullins, Tuscarora vice president and treasurer. Tuscarora will supply protective packaging to Thomson from an existing Ju rez facility.
The firm also will close a small thermoforming operation in Chula Vista, Calif., and move machinery to a new facility in Tijuana, Mexico, when it opens in March or April, Mullins said in a telephone interview. The Tijuana plant, however, mainly will be an expanded polystyrene molder for maquiladora customers. Tuscarora bought the Chula Vista facility, formerly called Thermoformers Plus, last spring.
Mullins said there are a few other consolidation candidates but he only cited the possibility of merging a small EPS operation near London with a larger one in London. Tuscarora's plants include 25 custom foam molding operations, all of which use EPS except a facility in Lewisburg, Tenn., and its year-old Storm Lake, Iowa, plant, which focus on foamed polyolefins.
The company also operates three custom thermoforming plants and eight integrated materials facilities that mold EPS and combine it with other materials for specialty packaging. It recently opened a facility in Brenham, Texas, to serve high-technology industries in southeast Texas. Most Tuscarora plants are in the United States.
Tuscarora hopes to save about $1.5 million annually in its reorganization. It will close design centers in Holden, Mass., and Burlington, Wis., and eliminate about 30 jobs from a total of 175 in its corporate and sales management staff.
Mullins said he does not expect any manufacturing jobs to go. The firm also will write-down obsolete machinery and buildings.
Tuscarora is streamlining to improve flexibility, it announced in a Feb. 2 news release. It expects reduced profit in its second quarter, ending Feb. 28, because of inefficiencies in its United Kingdom and thermoforming operations and because major electronics customers have scaled back operations more than usual during January.
Mullins said he is optimistic about the rest of the fiscal year, partly because United Kingdom and thermoforming operations are becoming more profitable.
Tuscarora recorded profit of $3.8 million for the quarter ended Nov. 30, only $80,000 higher than a year earlier despite a 15 percent sales increase to $61.3 million. It will take a $3.5 million pre-tax charge in the second quarter to cover streamlining costs.