Materials firm Trinseo is ending production of polycarbonate resin and combining management of three business units in an attempt to improve financial results.
In a Sept. 30 news release, officials with Trinseo in Wayne, Pa., said the firm will stop PC resin production in Stade, Germany, by January. Severance and related benefit payments to employees will be complete by the end of 2026.
Once operations have ceased, most of Trinseo's PC needs for its downstream, differentiated compounded products will be purchased from external suppliers, including its licensees. This purchasing change is expected to improve the site's profitability by $15 million to $20 million per year.
Also, as of Oct. 1, Trinseo is combining management of its engineered materials, plastics solutions and polystyrene businesses. These actions, which will eliminate an unspecified number of management and support jobs, began in the third quarter of 2024 and are expected to be completed by the end of 2025.
These moves are expected to save Trinseo $30 million per year by 2026. The newly combined engineered materials, plastics solutions and PS businesses will be led by Francesca Reverberi, who's currently senior vice president of engineered materials. Current plastics solutions and PS business head Bregje Van Kessel will become senior vice president of corporate finance and investor relations.
"These measures are the result of a thoughtful analysis of our portfolio and industry trends, combined with an understanding of the global competitive environment," President and CEO Frank Bozich said.
"We believe they will result in a more streamlined organizational structure that will fuel our ability to continue to grow strategically, while improving service to our customers and reducing costs," he added.
Related to the moves — with expected total savings of $45-$50 million per year — Trinseo will record total pre-tax restructuring charges of $23 million to $28 million and $1 million to $2 million of asset-related and contract termination charges. Those charges are primarily related to the PC resin site in Stade.
"None of these actions are taken lightly, especially those directly impacting our colleagues," Bozich said. "These are extremely difficult decisions that are in many ways driven by macroeconomic factors that are simply beyond our control.
"We greatly appreciate the continued focus and resiliency of our dedicated employees around the world as we navigate these changes together," he said.
Trinseo already had made major changes to the shape of the firm from mid-2022 to the end of 2023 to improve profitability. In 2023, the firm closed acrylic sheet plants in New Mexico, Denmark and Italy. Trinseo also closed a styrene monomer plant in 2023 in the Netherlands. The firm now purchases all of its styrene needs from third party suppliers. Those moves were expected to create annual cost savings of about $75 million.
Between mid-2022 and mid-2023, Trinseo also sold an acrylic sheet plant in Mexico to Plaskolite LLC, closed a styrene monomer plant and a PC resin line in Germany and reduced styrene butadiene latex production in Finland. In 2022, Trinseo had attempted to sell off all of its styrenics units, but was unable to find a buyer.
In the first half of 2024, Trinseo posted sales of $1.82 billion, down 7 percent vs. the same period in 2023. The firm posted a first half loss of $143 million after losing $397 million in the year-ago period.
For full-year 2023, Trinseo posted sales of just under $3.7 billion, down 26 percent vs. 2022. The firm also posted a loss of $701.3 million after losing $430.9 million the previous year.
Trinseo employs around 3,000 worldwide. On Wall Street, the firm's per-share stock price began 2024 near $8.40 per share, but had fallen under $3 by early June. From that point, the price recovered to close at $5.70 on Sept. 27 before declining again to around $4.90 in early trading Oct. 1.