SHREWSBURY, N.J. — Wellman Inc. is combining its fibers and recycled products groups into one business to improve profitability.
The Shrewsbury firm has ``not been able to generate satisfactory returns'' in the polyester fibers and PET packaging resin businesses, Thomas Duff, president and chief executive officer, said in a news release. The company plans to review all aspects of its operations, including its organizational structure, cost structure and manufacturing process.
``The goal is to ensure that Wellman can generate a satisfactory return even at today's depressed margins,'' Duff said. ``We are not willing to wait for an economic recovery in Asia, where ongoing problems have had a significant, adverse effect on the worldwide fiber and textile industries, or a cyclical recovery in the PET resins market.''
The combined fibers and recycled products group will report to John Hobson, vice president of the recycled products group. No layoffs are anticipated. The two groups initially were divided because they had slightly different end markets, said Jill Bongiovanni, investor relations manager.
``The fiber is derived from a chemical base and is used in the textile industry,'' she said in a telephone interview. ``The recycled products come from a recycling base and are used in the fiber-fill and carpet markets. By combining the groups, they will be simpler to run, have less overhead, reduce cost and identify opportunities in the industry.''
In addition, the firm is postponing the launch of the polyester staple fiber production line at its new plant in Pearl River, Miss. The 230 million-pound line was scheduled to begin operation in the third quarter.