A third Dolco Packaging plant will close in 2008 as Dolco's parent company, Tekni-Plex Inc., continues trying to improve its bottom line.
One hundred thirty-nine employees at the Dolco plant in Troy, Ohio, which makes polystyrene foam for food packaging, were notified this month that the facility will close at the end of December.
Packaging and tubing supplier Tekni-Plex of Somerville, N.J., is in the process of shuttering a Dolco plant in Memphis, Tenn., eliminating 83 jobs by late November. Tekni-Plex in April closed a similar factory in Fullerton, Calif., laying off 60.
Paul Young, the company's chief executive officer, said in an Oct. 10 news release the Troy plant had been unprofitable for some time.
``Closing this unprofitable facility allows us to focus our attention and investment resources on stronger market segments within the Dolco business portfolio,'' he said. Company officials declined further comment.
As it downsizes, an internal investigation into possible accounting irregularities at one of Tekni-Plex's divisions has resulted in the firing of the firm's chief financial officer.
Tekni-Plex is investigating allegations that it may have incorrectly recorded certain inventory and accounts receivable for its Colorite Polymers division from 2000-06. On June 26, the company had placed Chief Financial Officer James Condon on paid leave pending the outcome of the probe.
According to Securities and Exchange Commission filings, Condon was fired Oct. 3. The same day, Tekni-Plex hired Robert Larney to replace Condon, effective Oct. 8.
Prior to joining Tekni-Plex, Larney, 57, served as executive vice president and chief financial officer of Foamex International Inc. of Linwood, Pa. From 2000-07, Larney held several executive positions with the U.S. automotive division of Winterthur, Switzerland-based Rieter Group.
Gary Schafer will stay on as interim controller of the company's Colorite unit. He is a director at Chicago-based turnaround firm AlixPartners, who was appointed interim chief financial officer at Tekni-Plex.
Because the investigation into Colorite's finances is not complete, Tekni-Plex did not file its annual report on time. The company reported losing almost $87 million in the first nine months of its 2008 fiscal year, which ran through June double what the firm lost during the same period in 2007.
Tekni-Plex's full-year loss for fiscal 2007 was $61 million. Nine-month sales for fiscal 2008 were up 1 percent to $545 million. The company has not reported a profit since 2003.
Restructuring was needed after Tekni-Plex failed to make a $20 million interest payment in December 2007, causing it to default on part of its debt. Private equity firms Oak Tree Capital Management LP of Los Angeles and New York-based Avenue Capital Group own more than 80 percent of Tekni-Plex as a result of the restructuring.