Wellman Inc. is closing its PET fiber plant in Johnsonville, S.C., in an attempt to improve the company's financial performance.
Shrewsbury, N.J.-based Wellman also plans to sell its material recycling division, which converts post-consumer PET bottles to flake in Johnsonville. A sale of the firm's European PET resin and fiber assets - in Emmen, the Netherlands, and Mullagh, Ireland - also is possible.
Wellman's fiber production now will be consolidated into its plant in Florence, S.C., officials said in a Sept. 26 news release. The closing will eliminate about 350 jobs, although some jobs could be transferred to the Johnsonville site, Wellman investor relations officer Michael Bermish said in a telephone interview.
The closing is expected to be complete by the end of the year, Bermish said. Wellman will continue to operate a plant in Johnsonville that makes compounds based on recycled nylon. That plant employs about 200.
``Consolidating our U.S. fiber production is expected to increase operating income and reduce working capital,'' Thomas Duff, Wellman chairman and chief executive officer, said in the news release. ``We will be able to operate one fiber facility at close to full capacity rather than operating two underutilized facilities.''
Wellman will take a pretax charge of $30 million to $35 million in the third quarter for the closing. The firm's North American resin operations will not be affected by the move.
In the first half of 2006, Wellman posted a loss of $28 million as sales fell almost 4 percent to $705 million. The firm lost a total of almost $70 million in 2004 and 2005. Earlier this year, Wellman converted a fiber line in Port Bienville, Miss., into a PET resin line with annual capacity of almost 300 million pounds.
On Wall Street, Wellman's per-share stock price peaked above $14 in early 2005 but sank to less than $3 in early August 2006. It stood just above $4 in early trading Sept. 27.