Royal Building Products has closed its PVC pipe plant in Newbern, Tenn., about two months after its parent company Axiall Corp. was acquired by Westlake Chemical Corp.
Royal notified the state of Tennessee in a Workforce Adjustment Training and Notification notice Oct. 20 that it began a permanent closure of the plant on Oct. 17, with all workers to be gone by April 30.
Some 58 employees were affected by the closure, the WARN notice stated.
The closure was due to excess capacity in the pipe business and the operation's proximity to other affiliated plants, according to local reports. Production will be taken up by other facilities offering the same product lines. Some employees will remain in Newbern over several months to oversee the facility's safe and orderly shutdown. Royal is part of Royal Group Inc. of Woodbridge, Ontario, which in turn is part of Axiall Corp.
Other affiliated plants near Newbern include Royal Group PVC extrusion plants in Columbus, Ohio; Bristol, Tenn.; and Marion, Va.; and Westlake subsidiary North American Pipe Corp.'s factories in Calvert City, Ky.; Greensboro, Ga.; Booneville, Miss.; and Mount Vernon, Ind., according to Plastics News data.
The Newbern plant was acquired by the former Royal Plastics Group Ltd. of Woodbridge and opened as a vinyl siding operation in 1997. Royal Plastics had moved siding production there from a Vaughan, Ontario, facility after it closed the Vaughan factory when the United Steelworkers of America tried to organize workers there. Vaughan's workers agreed to the unionization drive in 1995 and the Ontario Labour Relations Board imposed a collective agreement arbitration award in favor of the union. Royal Plastics denied at the time that the Vaughan closure was related to the unionization drive, but rather to the proximity of Newbern to many Royal Plastics customers.
Royal Plastics converted the Newbern plant to PVC pipe production in 2014 to serve growing markets in the southern United States, and to capitalize on the site's location for transportation and distribution infrastructure. Royal Plastics was acquired by Axiall predecessor company Georgia Gulf Corp. in 2006.
Plastics News data estimated North American Pipe Corp.'s PVC pipe and profiles sales at $930 million in 2015. Woodbridge-based Royal Group's PVC pipe and profile sales were estimated at $755 million.
Westlake's purchase of Axiall made it North America's second largest PVC resin producer. Estimated combined pro forma sales of the companies' PVC pipe and profile businesses in 2015 were about $1.69 billion dollars, which would make it the second largest PVC extruder in North America after JM Eagle's estimated $2.5 billion in PVC pipe sales in 2015.