CHICAGO - Moll Industries Inc. plans to sell off some of its European tooling facilities and other underperforming plants while expanding into Brazil.
The injection molder is moving in two directions at once as part of a corporate restructuring, Chief Financial Officer William Teeple told an audience May 17 at the 2001 Injection Molding Financial Symposium, run by PenResearch Group Inc.
The company is looking at cutting costs and increasing profit. Moll currently is examining the performance of each of its 16 manufacturing facilities and analyzing both profitability and machine usage, Teeple said.
Moll has seen its sales slip from $398 million in 1999 to $343 million last year, according to its annual report released April 17. The firm also lost $5.9 million last year.
Those dips have sparked the custom molder to re-evaluate operations. Any plant with presses running at 50 percent utilization or below will be consolidated into other Moll facilities and possibly sold or closed, Teeple said.
``We really need to be overabsorbing machine usage to serve our markets,'' Teeple said. ``We want our machines utilized in excess of 60 percent at each plant.''
The Davie, Fla.-based company also plans to divest several tooling operations in Europe. Targeted for sale in the short term are mold-making operations in Bonneval and St. Vit, France. Neither plant has been profitable, Teeple said.
Moll plans to keep its tooling plant in Marinha Grande, Portugal, but is undecided on the status of its other European tooling facility in Broad Oak, England, Teeple said. That plant could be sold to the right buyer, he said.
The company has been disappointed with results at its French division, according to its quarterly financial statement filed May 21. A decline in tool-building activity and reduced mold-making profit margins were partly to blame, the report said.
The company also completed a plan in the first quarter of 2001 to consolidate its Crissey, France, molding plant into its Rouvray, France, facility, according to the Securities and Exchange Commission filing. Moll lost $671,000 in 2001 from severance costs because of the consolidation.
Last June, Moll sold its Chalon-sur-Saone, France, tooling plant. It also operates another mold-making facility in the United States.
Moll hopes to divest itself of those unprofitable plants in the next several months, Teeple said.
Although operating results have not been as strong lately as Moll has expected, the company still plans to grow in its core injection molding business. In mid-May, Moll acquired a plant in Brazil to help the company expand in Latin America, Teeple said at the Chicago symposium.
Moll plans to add a second plant in Brazil, Teeple said. The region is ripe for growth in many of Moll's business areas, he said. Moll molds parts for the household appliance, office equipment, telecommunications, automotive, medical and packaging areas.
The company declined to give further details on the acquisition but said an announcement of its Brazilian expansion and other news will be coming in early June. The company is unafraid to assume additional debt to continue its growth, Teeple said.
``We have available refinancing packages to bring leverage,'' Teeple said.
Many injection molders are re-evaluating operations this year, said Jeff Kolke, plastics and chemical industry marketing manager for GE Capital Commercial Finance of Stamford, Conn.
``We'll see a lot of layoffs and lower profits for many companies,'' Kolke said at the same symposium. ``Restructuring is becoming a big trend because of the economy right now.''
Moll was formed in 1998 through the merger of injection molders Moll PlastiCrafters LP and Anchor Advanced Products Inc. Moll is 26th in Plastics News' April ranking of injection molders, with $261 million in related North American sales.