French plastics and chemicals firm Rhodia Group will end nylon compound production in Mississauga, Ontario, by the end of June, opting instead to have those products toll-produced by compounder Alloy Polymers Inc.
The move will eliminate fewer than a dozen jobs, a spokesman for Paris-based Rhodia said. No machinery will be transferred to Alloy, he added. Richmond, Va.-based Alloy will become Rhodia's exclusive compounder of Technyl-brand compounds based on nylon 6 and 6/6 resins. Technyl compounds can be filled with glass, minerals or other materials. They are most often used in automotive, electrical/electronic and industrial applications.
Rhodia has produced nylon compounds in Mississauga since 1999 and has grown annual capacity to about 20 million pounds. Production of surfactants and silicone rubber products at that site will not be affected by the nylon move, the company said.
“This new production template brings us geographically closer to our customers,” Rhodia North American nylon Vice President Lucy Simek said in a May 20 news release. “It will … provide a sound basis for growing our market presence as future economic conditions allow.”
The move also represents Rhodia's diversification in nylon, though most of its sales still come from the automotive sector. The Mississauga area is home to many firms in the struggling automotive industry.
“Most of the [Technyl] applications are in the U.S.,” Simek added in a May 21 phone interview. “Automotive is one of the factors, but taking this step also gives us more flexibility and improves our efficiency.”
The Rhodia compounds initially will be made at Alloy's Richmond plant. Some of the Mississauga compounding equipment later may be moved to a Rhodia site in Brazil, Simek added.
In addition to Richmond, Alloy operates plants in Gahanna, Ohio, and at two sites in Texas — Crockett and Orange. The firm has more than 500 million pounds of annual compounding capacity and does all of its business in toll compounding.
Rhodia employs more than 14,000 and posted sales of about $6.4 billion in 2008. Almost 40 percent of the firm's sales come from nylon-related businesses.