A. Schulman Inc. announced Jan. 27 it is decreasing its North American inventory levels by about $10 million, or 15 percent, and reducing its manufacturing and delivery costs as it attempts to revive its North American operations.
The goal of the 26-week program is to generate operating savings of $6 million to $7 million a year beginning in fiscal 2004 for the supplier of high-performance compounds and resins, said Barry Rhodes, vice president of North American sales and marketing.
He said the company has brought in a consulting firm to evaluate whether any job cuts or plant closings will be needed.
``The particular details haven't been worked out at this time,'' he said. ``We're using the consultants and letting them go through their evaluation. At this time, there haven't been any job cuts or plant closings.''
Akron-based Schulman employs 2,400 and uses 13 manufacturing facilities in North America, Europe, Mexico and the Asia-Pacific region.
The global compounder's net sales in North America dipped to $387.8 million during 2002, down from $395.4 million the year before. Its net sales in Europe also dropped, but only by about $1 million, to $578.7 million.
Gross profit for its North American region did increase more than 29 percent over last year, to $54.1 million. That figure, however, is just more than half the $106.1 million profit seen by its European operations.
A news release blamed ``higher resin prices, continuing competitive pressure and weak demand for value-added engineered products'' as reasons the program is needed.
``We anticipate that positive benefits will first be recognized in the final quarter of fiscal 2003,'' said Terry Haines, president and chief executive officer. ``We expect that, for the full fiscal year, the benefits will offset most of the costs and there will not be a significant impact on our results.''
A third part of the program is to better the firm's response and delivery by reducing lead times to customers by 50 percent, Rhodes said. He did not reveal how much Schulman wants to reduce its manufacturing and delivery costs.