U.S. Plastic Lumber Corp. recently closed one of its recycling facilities and idled operations at three other plastics-related plants in efforts to increase efficiency and profitability.
On Jan. 8, the Boca Raton, Fla., company closed its Reidsville, N.C., facility said USPL Chief Financial Officer John Poling. The company also announced that it had idled its Green Bay, Wis.; Sweetser, Ind.; and Vernon, Calif., facilities, but officials did not explain whether those plants will reopen.
Business will be consolidated into USPL's eight other recycling plants throughout the country, Poling said. Other plastics manufacturing and recycling operations are in Chino, Calif.; Auburn, Mass.; Ocala, Fla.; and Chicago.
"We see greater efficiency in relocating production to larger regional facilities [and by] reducing the fixed cost associated with these plants," Poling said. "We see them as being more profitable on a consolidated basis."
He declined to discuss the number of employees affected by the move.
In a news release, USPL officials said plastics-related sales grew 40 percent in 2000, but profit margins declined because of increased expenses.
The company expects to report a fourth-quarter loss, but Poling declined to reveal how much.
USPL had been on an aggressive growth-through-acquisitions path in recent years, purchasing 22 companies. The Vernon plant, formerly Eureka Plastics of California Inc., was acquired in the fall 1999.
Poling said the consolidations should not be viewed as a slowdown in USPL's growth plans. The company plans to improve financial performance by maintaining the same level of sales with fewer facilities.
"We're not giving up the business — we're just moving the business to a more efficient and more profitable location," Poling said.
USPL Corp., reported 1999 sales of $138.5 million. Chicago-based USPL Ltd., USPL's plastics recycling arm, tied for 46th in Plastics News' ranking of North American recycling companies and brokers, with 1999 estimated sales of $10 million.