PolyOne Corp. is eliminating 105 more jobs by closing a color concentrates plant in Fort Worth, Texas; idling two engineered materials compounding lines in Macedonia, Ohio; and reducing shifts at its seven PVC compounding plants.
Those moves - combined with the previously announced closings of a films plant in Yerington, Nev., and an engineered materials compounding plant in Bethlehem, Pa. - are expected to save the Cleveland-based compounding and distribution leader $15 million annually, officials said. Of the new cuts, 32 will come from Fort Worth, 19 from Macedonia and 54 from the PVC cutback. The Macedonia changes leave PolyOne with 66 employees at that plant, spokesman Dennis Cocco said.
PolyOne confirmed the cuts as it announced a $6 million loss for the second quarter of 2003. In the first half of the year, PolyOne lost $25.3 million, even though sales climbed more than 2 percent to almost $1.3 billion.
In a July 29 news release, company officials described North American customer demand as ``in an apparent holding pattern'' and reported ``no real evidence of an economic recovery'' for the second half of the year. The firm also is being buffeted by high resin and energy costs and by the inability to pass all of those increases on to its customers.
``We are committed to making the necessary changes to return the business to profitability and to building a stronger performance base going into 2004,'' said PolyOne President and Chief Executive Officer Thomas Waltermire.
The $25.3 million first-half loss is about half the size of the loss PolyOne reported in the same period of 2002. PolyOne finished 2002 with a loss of $59 million, after losing $46 milion in 2001.
PolyOne's internatonal plastic compounds and colors unit offered a rare first-half bright spot, with sales up 31 percent.
In Australia, PolyOne sold its stake in Welvic Australia Pty. Ltd. - that country's largest PVC custom compounder - to business partner Orica Ltd. for almost A$3.5 million (US$2.3 million). Welvic, based in Melbourne, has annual sales of about A$40 million (US$26.6 million) and controls more than half of the Australian PVC compounding market. Its products are sold into the wire and cable, building, automotive and footwear segments. The deal was announced in a July 23 news release. Orica officials also said they have agreed to partner with PolyOne to distribute the firm's compounds and concentrates in Australia and New Zealand. Orica's Chemnet unit will handle distribution.
Since early 2001, PolyOne has closed more than a dozen facilities in an effort to improve its financial performance. The firm also has sold off stakes in four business ventures since December. PolyOne leads the North American compounding market with a 12 percent share of total sales.
Rosemarie Morbelli, a stock analyst with Ingalls & Snyder in New York, said that although PolyOne is moving in the right direction, the firm ``needs to do more, based on the lack of growth in their industry.''
``PolyOne's cost structure is too large when you consider the demand and competition that's out there,'' she said. ``The first round of cuts isn't that hard to make, but then it gets more difficult.''