Middlebury, Conn.-based polymer and chemical producer Crompton Corp. is merging two of its largest divisions into a new entity, Crompton Specialty Chemicals.
The new division will be made up of the Plastics and Petroleum Additives (PPA) and Performance Chemicals and Elastomers (PCE) business groups. PPA includes Crompton's olefins, styrenics, vinyl and petroleum divisions and PCE comprises urethanes, refined products, rubber and ethylene propylene diene monomer (EPDM).
Sean O'Connor, vice president of plastics additives for Crompton, said the merger will streamline the company's communications.
``We're putting all our chemical businesses into one division,'' he said. ``In the past we've had each silo doing its own thing; we're trying to get away from that.''
He added: ``We're pooling together the selling functions and best business practices from each business unit.''
Crompton is studying workload issues and will use the analysis to determine which tasks are the most critical to the company. O'Connor said the company would begin implementating a streamlinging plan by the end of the third quarter.
The consolidation will not suppress the broad range of additives Crompton currently produces, said O'Connor, who has been vice president of both vinyl and petroleum additives. The division's focus will still be on plastics additives, the largest area in Crompton by far, making up 58 percent of the company's sales. The company claims to be the world's largest producer of heat stabilizers and auxiliaries for PVC.
O'Connor also said he has met with executives from Crompton-owned Davis Standard Corp. to discuss how to reinvigorate the processing equipment manufacturer. Davis-Standard produces extrusion systems, feed screws and process controls. The division's sales fell 7 percent from first-quarter 2003 to first-quarter 2004.
Crompton is on the rebound from a tough year. Its operating profit fell from $85.4 million in 2002 to a loss of $35 million for 2003. The company recently reported first-quarter 2004 sales that were up 17 percent compared to the same period in 2003. Polymer additive sales were up 21 percent from $301.6 million to $363.3 million. Crompton attributes these increases mostly to the acquisition of GE's Specialty Chemicals business on July 31, 2003. However, operating profit for polymer products was down 34 percent from the first quarter of 2003, mostly due to higher raw material and energy costs, according to the company.
Crompton is publicly traded on the New York Stock Exchange. The company's products are produced in 24 plants worldwide.