A. Schulman to shutter St. Thomas, Ont. facility

Akron, Ohio-based resin manufacturer and compounder A. Schulman, Inc. has announced plans to shut down a manufacturing facility in St. Thomas, Ont. The move is part of the company’s continued efforts to improve the productivity of its North American operations.

According to the company, the St. Thomas facility primarily produces engineered plastic resin for the automotive market. In recent weeks, the company had noted its intentions to cut costs, citing the pressures of high oil prices and sluggish automotive sales.

In January, company president and CEO Joseph Gingo announced a 100-day plan to improve profitability, primarily by improving capacity utilization and focusing on value-added products.

The plant in St. Thomas has a capacity of 74 million pounds per year, and currently employs 120 people. Production of low-margin business will be discontinued, and the rest will be absorbed by some of the company’s other North American plants.

A. Schulman said it expects to save roughly US$6-7 million in the fiscal year 2009, and approximately US$9-10 million beginning in 2010.

“Our plan is to achieve more efficient and effective utilization of our North American manufacturing facilities and to drive profitable growth,” said Gingo. “By consolidating production, we will improve overall capacity utilization. In addition, we plan to exit low-margin businesses which no longer fit our strategy of focusing on higher value-added products.”

A. Schulman has also announced plans to pursue the sale of a plant in Orange, Tex. with an annual capacity of 135 million pounds. The company hopes to divest the plant before the end of the fiscal year.

The two plant closures are the latest strategic actions taken by the company to move towards a more sustainable business model. A. Schulman noted that its North American operations have reduced manufacturing capacity by 35 per cent and the employee headcount by 33 per cent from 2000 to 2007.

“We continue to drive our strategy with a real sense of urgency and to make progress in transforming our North American operations to improve our performance,” said Gingo.