ATLANTA (Dec. 21, 3:45 p.m. ET) — Royal Building Products plans to close its Milford, Ind., plant in March.
The major extrusion firm, a subsidiary of Georgia Gulf Corp. of Atlanta, said it issued WARN notices on Dec. 13 to the approximate 70 employees in Milford. The site produces vinyl decking, fence and railing and was part of Georgia Gulf's acquisition of Royal Group Technologies in 2006.
Production of vinyl fence, many of the decking products like Brock Deck and Deck Lok, and rail products will be transferred to another, undisclosed Royal Building operation, where they will provide greater synergies.
“Unfortunately, the prolonged downturn in North American housing and home remodeling has significantly impacted sales and the profitability of these products,” stated Georgia Gulf spokesman Alan Chapple in a prepared statement.
“Discontinuing a product line is always a difficult decision because of the resulting impacts on those employees, customers and the community,” Chapple added. “However, we have a duty to the 3,600 employees elsewhere in our organization – as well as our shareholders and business partners – to ensure that Georgia Gulf and Royal Building Products are profitable and healthy businesses, and that is the driving force behind this decision.”
A former Royal Building Products employee who wanted to remain anonymous said mass retailers are demanding ever-lower prices for building materials in a competitive market and this is hurting profit margins at profile extrusion companies.
Also impacting extrusion operations is the seasonality of building material sales. An operation can be very busy for half of the year and operating well below capacity the rest of the year.
Royal Building Products runs 17 plants, including the Milford one, in North America, according to Plastics News' 2011 pipe, profile and tubing survey.