Ferro Corp. has reorganized its plastics businesses and other segments into two new operating units.
Specialty plastics and polymer additives which, when combined, accounted for about 25 percent of the Cleveland-based firm's first-half sales now will be placed in a group along with Ferro's performance coatings and pharmaceuticals units.
The other new unit will include Ferro's electronic material systems, and color and glass performance materials businesses.
The key strategic driver here was to combine businesses in Ferro with similar operational and technology characteristics, spokeswoman Mary Abood said in an Oct. 7 phone interview. In plastics, we're combining businesses that run large-volume manufacturing businesses with world-class cost structures.
Some areas of specialty plastics and polymer additives already were combined in early 2008 to create a more efficient sales and marketing organization, with a broader portfolio to take to our customers, Abood said.
In the first half of 2009, Ferro's specialty plastics unit saw sales fall 43 percent to about $72 million vs. the year-ago period. The unit's operating income fared better, falling only 12 percent to $4.2 million.
That unit includes a filled and reinforced compounds plant in Evansville, Ind.; a liquid color plant in Plymouth, Ind.; a colorants plant in Stryker, Ohio; and a specialty elastomer plant in Carpentersville, Ill.
Abood said there had been job cuts at the plants since Jan. 1, but would not give details. We're running the plastics business very cost effectively to meet the current market, she said. The challenge is to continue to find ways to be cost-efficient.
Overall, Ferro posted a first-half loss of $31 million as sales fell 38 percent to $757 million.
The firm ranks as one of North America's 30 largest plastics compounders, based on a Plastics News industry estimate.
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