Jun 5 2007
Chemtura Corporation announced today that the company plans to restructure its global supply chain for standard antioxidants in order to position itself to be more competitive in the world plastics market and to more effectively serve its global customers. The restructuring supports Chemtura's overall objectives of reducing costs and optimizing its global manufacturing footprint, while maintaining the company's strong commitment to the antioxidants business.
This restructuring, which includes the closing and/or divesting of selective sites in Europe, as well as potential investments in other parts of the world to better meet customer needs, will result in pre-tax charges, principally severance costs, of approximately $15 million to $20 million and accelerated depreciation of approximately $30 million to $35 million in the second and third quarters of 2007.
Chemtura's manufacturing facilities at Pedrengo and Ravenna, Italy, and Catenoy, France will be affected by these changes. During the third quarter of 2007, the company intends to end standard antioxidant production and to close the antioxidant facilities at Pedrengo and Ravenna and also proposes to shut down two intermediate chemical products at Catenoy. The intermediates produced at Catenoy are used at the Pedrengo facility.
Approximately 125 to 135 employees would be affected at Pedrengo, about 25 to 35 at Ravenna and around 35 at Catenoy.
"Although significant gains in productivity have been made in recent years at Pedrengo and Ravenna, those gains have been overshadowed by increasing operational and raw material costs," said Anne Noonan, president of Chemtura's Polymer Additives Group, which operates the sites. "As a result, the current manufacturing position for standard antioxidants at these sites continues to fall below profit expectations.
"We remain highly committed to our antioxidants customers," Noonan said. "To replace the products manufactured at Pedrengo and Ravenna and to ensure consistent supply to our customers, Chemtura will continue to supply antioxidants through a combination of local sourcing agreements and through the company's own large, global manufacturing network."
The network includes facilities in the United States, Germany, Saudi Arabia and South Korea.
"These strategic changes underscore the need for competitive sites," said Chemtura Chairman and CEO Robert L. Wood. "These actions will give us a stronger, more competitive manufacturing base, which is necessary for success in a very competitive global marketplace and will allow us to take advantage of growth opportunities in Asia, Europe and the Middle East. We will continue to examine our global manufacturing footprint to ensure that our operations are as efficient as possible and serve our customers as effectively as possible."
Chemtura's standard antioxidants, which are sold under the Chemtura trade names Anox(R) 20, Anox(R) PP18 and Alkanox(R) 240, are widely used in the manufacture of plastics to increase end-product strength and durability.