PolyOne Corp. will close four color compound plants in the second half of 2002 while spending $18 million to improve its eight remaining color sites.
Plants in Broadview Heights, Ohio; Florence, Ky.; Gastonia, N.C.; and Somerset, N.J., are closing, in moves that will eliminate 180 jobs. Improvements to the remaining sites will create 30 new jobs.
The moves will result in annual savings of $16 million beginning in 2003, according to the company. Some equipment from the closed sites will be transferred to other PolyOne plants.
The plant improvements will result in the remaining eight plants having 15 percent more capacity than the 12 plants currently have, according to PolyOne spokesman Chris Farage.
``We'll have a smaller, more focused network yet be able to increase capacity,'' Farage said.
Cleveland-based PolyOne now has announced plans to close 11 plants this year. The firm has struggled with lower demand and profit as it has worked to integrate the businesses of Geon Co. and M.A. Hanna Co., the two firms that merged to form PolyOne last year.
Product and market assignments for the firm's eight remaining color plants also were revealed in an Aug. 3 news release:
* Elk Grove Village, Ill., will produce polyolefin colorants for the packaging market in small- and medium-order sizes, as well as PET colorants.
* Fort Worth, Texas, will produce compounds for the custom profile and sheet markets, as well as acrylic, PVC and polyolefin products.
* Glendale, Ariz., will produce colorants for multiple markets on the West Coast in small- and medium-order sizes.
* Lehigh Valley, Pa., will produce polyolefins, PVC and acrylic products for the wire and cable and general industrial markets.
* Norwalk, Ohio, will produce compounds for the automotive market and non-automotive molders.
* Seabrook, Texas, will produce styrenics and polymers - with an emphasis on large orders for the film, pipe and fittings markets - and additive packages.
* St. Peters, Mo., will produce styrenic colorants for multiple markets.
* Vonore, Tenn., will produce polyolefin colorants in large order sizes.
``Our drive to reconfigure and invest in our colorants capabilities reflects our confidence in the potential of this business,'' President and Chief Executive Officer Thomas Waltermire said in the Aug. 3 release. ``That confidence extends to the future of our entire industry, despite the current market weakness.''
PolyOne expects to announce a reconfiguration and upgrade of its PVC compound business in the fourth quarter of this year. It currently operates 13 PVC compounding plants.
The PVC announcements are expected to be the last part of PolyOne's business review that could include plant closings.
PolyOne rebounded somewhat in the second quarter, posting a profit of $2.5 million after losing more than $21 million in the first quarter. Pro forma sales, however, were down almost 17 percent compared to the same period in 2000.
Through the first half of 2001, PolyOne lost almost $19 million, with sales off more than 15 percent from the first half of 2000.
Among PolyOne's individual businesses, PVC compounds experienced the steepest drop in the second quarter, dropping almost 23 percent compared to the same period a year ago. PVC compounds are the largest segment of PolyOne's product mix, accounting for more than 25 percent of the firm's total sales in the second quarter.
PolyOne's resin distribution unit, which ranks third in the North American market, saw second quarter sales drop 11 percent compared to the same period a year ago. Resin distribution brought in more than 24 percent of PolyOne's second-quarter sales total.
``Our customers have significantly reduced their inventories in the past 12 months,'' Waltermire said in a July 31 news release that accompanied PolyOne's second-quarter financial report.
``However, most markets are now forecasting weak third-quarter demand, and we do not expect our total sales to grow compared with the quarter we just completed.''
Stock-wise, PolyOne was trading at $10.55 per share Aug. 3 after starting the year in the $6 range.