Poor financial results are prompting officials with Wellman Inc., a producer and recycler of PET resins and fibers, to look at options for its noncore businesses, including a possible asset sale.
``We are reviewing the performance of all of our operations,'' Chairman and Chief Executive Officer Thomas Duff said in a news release. ``We expect that these steps will result in improved operating performance, cash flow and return to our shareholders.''
In an Aug. 24 phone interview, Wellman investor relations officer Michael Bermish declined to identify which businesses are considered ``noncore.'' He added that all of Wellman's businesses and plants will be looked at during the review. In addition to an asset sale, possibilities for Wellman include a restructuring or entering into joint ventures.
The firm makes PET resin at plants in Port Bienville, Miss.; Florence, S.C.; and Emmen, the Netherlands. Wellman's PET fiber plants - some of which use recycled content - are in Florence; Johnsonville, S.C.; and Mullagh, Ireland. The Johnsonville plant produces nylon fiber as well.
Wellman's major recycling facilities are in Johnsonville; Verdun, France; and Gelderland, the Netherlands. The firm claims to be one of the world's largest plastics recyclers, with the capacity to reclaim almost 3 billion PET bottles and containers annually worldwide.
Shrewsbury, N.J.-based Wellman has struggled in 2006, posting a first-half loss of almost $28 million as sales fell almost 4 percent to $705 million. The first-half loss comes after the firm posted full-year losses of $30 million in 2005 and almost $39 million in 2005. The 2005 loss occurred even as sales increased more than 5 percent to almost $1.4 billion.
Amid that tough financial atmosphere, Wellman recently increased its PET capacity by almost 300 million pounds by converting a fiber line in Port Bienville. In the first half of 2006, Wellman generated about 60 percent of its sales from PET resin and the remainder from fibers and recycled products.
Bermish said the decision to increase PET capacity was made about 18 months ago and was not affected by present conditions. He added that the new capacity ``was fairly easily absorbed by the market.''