PolyOne Corp. will close its engineered films plant in Burlington, N.J., in February, in a move that will eliminate 115 jobs and save the Avon Lake, Ohio-based compounding leader more than $5 million a year.
In a Dec. 11 news release, PolyOne Chief Executive Officer Thomas Waltermire said the company's engineered films business ``has felt the effects of raw material inflation and offshore competition in some of its key markets.''
``We are restructuring to bring capacity in line with sales demand and to reduce our cost structure in order to improve our profitability,'' Waltermire added.
The Burlington plant makes calendered PVC film products for decals, window shades, wall coverings and other thin-film products. Work done in Burlington now will be transferred to film plants in Winchester, Va., and Lebanon, Pa.
Some auxiliary equipment may be transferred from Burlington to the other sites, PolyOne spokes-man Dennis Cocco said, but calendering equipment will remain in Burlington. Officials haven't decided yet if the calendering equipment will be sold or retained.
The move will result in annual pretax savings of $5.5 million for PolyOne, North America's largest compounder, with a market share of 10 percent.
In October, PolyOne identified engineered films as one of three businesses it was looking to sell to improve financial performance. Since the start of 2001, PolyOne has lost almost $175 million as it has struggled with a soft economy and the challenge of integrating Geon Co. and M.A. Hanna Co., which merged to form PolyOne in 2000. PolyOne has closed more than a dozen plants and cut more than 900 jobs in that time.
Earlier this year, PolyOne closed an engineered films plant in Yerington, Nev. Geon had acquired the Burlington plant in 1998 as part of a deal in which it received Occidental Chemical's PVC compounding business in return for a majority stake in Geon's PVC resin assets. PolyOne closed its compounding operations in Burlington in 2002.
Engineered films generated $153 million in sales in 2002, representing 6 percent of PolyOne's total. Most of the business came from Geon's 1999 purchase of O'Sullivan Corp. for $191 million. One mergers and acquisitions consultant recently estimated the unit would fetch $50 million to $75 million in today's market.
Spokesman Cocco said the films business still is for sale, and that the Burlington closing is being done ``to improve the performance and enhance the value of the business.''