Downturns in compounding end markets are leading PolyOne Corp. to close eight production plants in the next nine months, eliminating 150 jobs.
Avon Lake, Ohio-based PolyOne announced the moves July 28. Seven of the eight plants are in North America, with the remaining plant in the United Kingdom.
The list of locations includes:
* A PVC compounding plant in Plaquemine, La., and part of a PVC compounding operation in Avon Lake.
* Engineered materials plants in Macedonia, Ohio; and Valleyfield, Quebec.
* A color and additives products plant in St. Peters, Mo.
* Plastisols plants in Commerce, Calif.; and Sussex, Wis.
* A plant making coated fabric materials in Bolton, England.
The affected plants employ 240, but 90 of those jobs are expected to be transferred to the firm's more than 30 remaining production sites, said Ken Smith, chief information and human resources officer.
``After conducting a thorough review of our entire operation, our business teams identified opportunities to further align our capacity and production assets to improve the effectiveness of our global manufacturing footprint,'' PolyOne's Thomas Kedrowski said in a news release. Kedrowski serves as senior vice president of the firm's operations and supply chain.
PolyOne Chairman, President and Chief Executive Officer Stephen Newlin said, ``The recent unprecedented increases in raw material and energy costs were critical factors in our decision making.
``Declining demand in markets such as housing and automotive has created a timely opportunity to remove excess capacity,'' Newlin added.
Market analyst Saul Ludwig said the closings are consistent with Newlin's strategy to transform PolyOne. Newlin has held the top spot at the firm since early 2006.
``The goal all along has been to move the needle more to specialty products and to cut costs and be more efficient,'' said Ludwig, who's with Key Banc Capital Markets in Cleveland.
PolyOne will take a one-time charge of about $31 million related to the closings. The firm ranks as North America's largest compounder and has annual sales of more than $2.7 billion.
The move is the second major cutback in PolyOne's eight-year history, which began when Geon Co. and M.A. Hanna Co. merged to form PolyOne in 2000.
In its first five years of operation, PolyOne lost about 30 percent of its annual sales, closed more than 20 plants and cut about 1,300 jobs. The firm posted a total loss of almost $300 million during that period, even after posting profits in 2004 and 2005.
PolyOne recovered with a $123 million profit in 2006, but that number fell to $11 million last year.
First-quarter 2008 profit for PolyOne was roughly flat at $6.5 million, when compared with the year-ago period, even as sales grew 9 percent to almost $714 million.