Compounder ICO Inc. will close its plant in Lovelady, Texas, by the end of the year as part of a cost-cutting program at the Houston-based firm.
The publicly held company also is seeking a new chief executive officer to replace Tim Gollin, who resigned in July. Jon Biro, a nine-year ICO veteran who recently served as chief financial officer, is ICO's interim CEO.
Work and most of the equipment from the Lovelady plant will be shifted to a site in China, Texas, Biro said in a recent telephone interview. Biro declined to specify how many jobs will be lost in the closing or to estimate annual savings.
Biro said ICO is considering other consolidations among its 19 remaining global plants, which include eight in Europe, seven in North America, three in Asia/Australia and one in South America. The firm already has cut the size of its headquarters staff from 40 to 25 this year. In total, ICO employs about 900.
``There will be head-count reductions around the world,'' Biro said. ``We're making the changes that are necessary to get our cost structure in line with our business volumes.''
In the past couple of years, ICO has focused on producing compounds for the rotational molding market. The firm also offers a range of grinding and size-reduction services, while its Bayshore Industrial unit makes additive concentrates for the film market.
``Rotomolding will continue to be our focus, but we'll also seek out customers in other markets,'' Biro said.
Marketing and planning manager Richard Neff added that while grinding will remain ``the cornerstone'' of ICO's service businesses, the firm will continue to promote niche businesses such as jet milling and cryogenic grinding.
In the first nine months of ICO's fiscal year, which runs through September, the firm posted a loss of $37.1 million, though sales grew almost 17 percent to $153.2 million. Biro chalked up much of the loss to goodwill impairment. ICO had lost $8.2 million in the same period last year.
Biro declined to comment on Gollin's departure. As part of the Travis Street Partners investment group, Gollin helped lead a bitter proxy fight in 2001 against the Pacholder family, which had operated ICO for at least 15 years. The Pacholders eventually bowed to shareholder pressure and left the firm.
Gollin is not a major shareholder in ICO, Biro said. Gollin could not be reached for comment.
Previously, officials with ICO and Travis Street publicly discussed the possibility of taking ICO private. Biro said that option now is ``on the back burner.''
``We have to deal with the [financial] issues at hand before considering [going private],'' he said.