BEACHWOOD, Ohio—Omnova Solutions Inc. plans significant cuts to its operating expenses, including shutting down manufacturing operations at its plant in Calhoun, Ga., and reducing styrene butadiene capacity at its plant in Mogadore, Ohio.
The plan is expected to reduce annual operating expenses by $14 million to $17 million, according to a news release the Beachwood-based company issued June 11.
Omnova said it will move most production of styrene butadiene latex materials for the carpet and paper markets in Calhoun to its plant in Green Bay, Wis., with production of vinyl pyridine latex products being consolidated into other company plants. The Calhoun plant will be turned into a site for distribution and technical service. About 40 positions could be affected at the plant. The closure is expected to last through the middle of fiscal year 2016.
Employment is expected to remain stable at the Mogadore and Green Bay plants, the company said. The Mogadore plant will continue to make polymers such as styrene butadiene latices, mainly for specialty applications, but Omnova will close about 130 million pounds of styrene butadiene manufacturing capacity.
Thursday's announcement is in addition to the previously announced restructuring in Mogadore and the closure of emulsion polymer manufacturing at the company's Akron plant. (The expected savings of $4 million from those moves is included in the total operating cost reduction announced June 11.)
The company has faced challenges in recent years. Demand for paper coatings has been dropping, and the company had an overcapacity of styrene butadiene in its North American coated business, chairman, president and CEO Kevin McMullen told Crain's Cleveland Business last fall.
Over the winter, Omnova faced a challenge from an activist shareholder group, which lamented the company's recent performance. The company and the shareholders reached an agreement in February.