An ongoing slump in global demand has led Spartech Corp. to cut 260 jobs and close part of a sheet extrusion plant in Donchery, France.
The job cuts were spread across all business units and were enacted during February and March, officials with Clayton, Mo.-based Spartech said in a March 4 news release.
Officials estimate the cuts will create $11 million in annual savings. Spartech plans to save an additional $11 million in fiscal 2009 through employee flex time, temporary plant shutdowns and temporary pay cuts, officials said in the release. Details of those steps were not provided and the firm's officials could not be reached for comment.
Sales at Spartech a major producer of sheet and compounds were down 4 percent in the firm's fiscal 2008 and plummeted 26 percent in the first quarter of its fiscal 2009. Spartech also lost $5.1 million in the quarter, which ended Jan. 31.
We continue to manage through a very challenging economic environment that has been negatively impacted by depressed demand in the end markets we serve, President and Chief Executive Officer Myles Odaniell said in the release. Our seasonally weak first quarter was further impacted by broad-based customer shutdowns and destocking in November and December.
The recent cuts came after Spartech eliminated 440 jobs and closed a sheet plant in Mankato, Minn., and a compounding plant in St. Clair, Mich., in fiscal 2008.
Those moves saved the firm $15 million in 2008 and will create another $10 million in savings in 2009. Spartech also recently closed Plastics Recycling Center LLC, a polypropylene recycling joint venture it had operated in Summerville, S.C., with Washington Penn Plastic Co. In total, cost cutting yielded savings of $50 million in fiscal 2008, Spartech officials said.
For full fiscal 2008, Spartech lost $192 million on sales of $1.4 billion. The firm had shown a profit of $34 million in fiscal 2007.
Spartech was North America's eighth-largest film and sheet maker in a recent Plastics News industry ranking, with related sales of almost $1 billion in 2007.