PolyOne Corp., North America's largest plastics compounder, is closing four of its U.S. plants in a move aimed at increasing profit by $6 million annually.
Plants in Conroe, Texas; Denver; Glen Rock, Pa.; and San Fernando, Calif., will close their doors by the end of the second quarter, company officials said Jan. 29. The closings will eliminate 65 jobs and cost the company about $9 million in restructuring expenses.
The closings were recommended by a cross-functional team that is studying Cleveland-based PolyOne's Plastics Compounds and Colors unit to find ways to improve customer service and reduce costs.
"We knew we would have some difficult decisions to make," said Thomas Waltermire, PolyOne chairman and chief executive officer. "Regrettably, these changes impact a number of our employees and communities, but it is imperative that we achieve both the customer service and profitability goals that we have set."
The Conroe site made PVC powder compounds used in vinyl windows, siding and pipe. Those products now will be supplied by PolyOne plants in Pasadena, Texas, and Plaquemine, La.
The Denver plant, which made cross-linked polyethylene compounds, actually was closed in late 2000, with production being shifted to Valleyfield, Quebec.
In Glen Rock, PolyOne operated a nylon recycling facility inside a Tyco Electronics facility. Most of the plant's output was then sold to Tyco, with the remainder going to resin brokers and other customers. Tyco is trying to sell the entire facility, meaning PolyOne may have had to relocate regardless of its internal plans. Nylon recycling now will be shifted to Bethlehem, Pa.
Production of polyolefin-based color concentrates that had been done in San Fernando will be transferred to Glendale, Ariz. The closing also may lead PolyOne to sell compounding equipment and property. The firm owns the Conroe site but leased the others.
Polyone's review of its sites and facilities is ongoing. Spokesman Chris Farage declined to specify if there would be further plant closings in 2001, saying only that the company "would look at more options."
PolyOne, formed from the Sept. 1 merger of Geon Co. and M.A. Hanna Co., saw its pro forma profit drop 12 percent through the first 9 months of 2000. The firm will release full-year results Feb. 1. Pro forma sales for 2000 are expected to top $3 billion.
PolyOne also had announced Dec. 19 that it expected to lose 10-15 cents per share in the fourth quarter. Analysts had expected anywhere from a profit of 1 cent per share to a loss of 12 cents per share.
PolyOne's stock price opened Sept. 1 at $9, dropped below $5 in early December and stood Jan. 29 at about $8.