Moll Industries Inc. is closing plants in Rochester, N.Y., and Morristown, Tenn., as part of a restructuring that the custom injection molder hopes will turn around disappointing performance and beef up its presence in the southern United States and Brazil.
While the company expects to lose money in 2001 and has been closing plants and shedding factories in both the United States and Europe, Moll on June 13 announced new details. The Davie, Fla.,-based company said it will enlarge a plant in San Antonio and invest about $1 million by year's end in two injection molders in Brazil.
In the United States, the company will shift a total of about 25 presses from the underused Rochester and Morristown plants to four other factories - in Austin, Texas; Fort Lauderdale, Fla.; Nashville, Tenn.; and Seagrove, N.C. Initially, all of the presses will be moved, but some could be sold later, said Bill Teeple, Moll's chief financial officer. As many as 170 jobs will be cut, he said.
In the next few months, the company plans to expand the San Antonio factory to 100,000 square feet from 60,000 square feet and add seven to 10 injection presses, up from 60 now.
Moll officials said last month they had invested in Brazil, but they did not reveal details until the restructuring announcement. The company said it has invested in Brasmolde Industria e Comercio Ltda., an injection molder in Jundiai, just north of Sao Paulo, to serve customers in the communications and connectors industries. The venture will be known as Brasmolde-Moll Plasticos SA.
Moll also is looking to invest in a second Brazilian molder to serve its more traditional appliance and packaging customers and hopes to complete that by the end of the year, he said. The second investment will be south of Sao Paulo, he said.
Teeple said the company plans to invest a total of $1 million in Brazil by year's end and has options to invest substantially more later.
Brazil's energy crisis has forced economists to cut growth estimates in half this year, but Teeple said Moll looks at Brazil as a long-term growth market.
The Rochester and Morristown plants were at the low end of Moll's utilization targets, and Teeple said the company is retaining ``practically'' all of the business from customers at those plants. Many of those customers had moved their production to the South, Teeple said.
Generally speaking, he said, Moll's strategy calls for molding plants to utilize about 60 percent of their capacity.
``Particularly in the industry environment we are seeing this year, machine utilization is absolutely critical,'' he said.
Moll had seen sales suffer, particularly as some of its high-tech business declined in the United States and its European automotive work suffered early in the year, Teeple said.
But he said the company's traditional packaging and appliance markets are strong, and its medical business is expected to pick up in the second half of the year.
The company's losses should get smaller as the year moves on, he said. Moll posted an operating loss of $800,000 in the first quarter. Quarterly sales, at $67.1 million, were down $9.5 million from the same period a year earlier, after factoring out business units that have been sold or shuttered, according to company filings with the Securities and Exchange Commission. In particular, sales to Colgate-Palmolive Co., Abbott Laboratories and Renault SA were down.