Onmova to cut latex production

BEACHWOOD, Ohio—Omnova Solutions Inc. has launched a cost-cutting plan that includes elimination of manufacturing at a plant in Georgia and cutting production at a site in Ohio.

Its aim with the overall project is to reduce operating expenses by $14 million to $17 million annually.

The company's goal with what it called a footprint redesign is to reach that mark by 2017.

Omnova will shut down the manufacturing end of its Calhoun, Ga., facility and shift about 135 million wet pounds of styrene butadiene latex for the carpet and paper markets to its very modern, state-of-the-art complex in Green Bay, Wis., the firm said.

Vinyl pyridine latex manufactured in Calhoun for tire cord applications will be consolidated into other plants to continue serving customers from multiple sources of supply, including overseas, within the company, according to a spokeswoman.

Cutting production at the Georgia site, along with product and process transitions between facilities, ultimately could affect nearly 40 employees who make up the production crew at the plant, she said.

“We regret the impact these actions will have on our employees, and we will provide assistance to help those affected,” Chairman and CEO Kevin McMullen said.

Though difficult, he said, “we know this is a path we must take to bring our business in line with the market realities we face, while simultaneously improving performance and positioning the company for stronger and more sustainable profitable growth.”

In addition, the Beachwood-based firm will reduce SB capacity at its Mogadore, Ohio, site by about 130 million pounds.

Omnova will continue to produce SB lattices and other polymers at the plant. Those are primarily for specialty applications such as nonwovens, building and construction, tape and adhesives, and oil and gas exploration and production.

Employment at the Mogadore and Green Bay facilities is expected to remain stable, the company spokeswoman said.

Actions at the Mogadore plant will position it for future growth opportunities in specialty markets, the company said.

It likely will take up to 12 months to complete the move of SB products to Green Bay and VP production to other sites, along with the shutdown of SB manufacturing in Mogadore, the spokeswoman said.

Green Bay produces styrene butadiene latex for the carpet and paper industries, so all of the SB production for those segments now will be at that plant, she said.

“The footprint redesign helps us meet our objective of cost effectively matching capacities and capabilities with current market conditions and future growth opportunities,” McMullen said.

He said the plan “will contribute significantly to three of our four strategic priorities: stabilizing the traditional core businesses (paper and carpet) and driving margin expansion and improved cash generation; accelerating profitable growth in our key specialty businesses—with manufacturing aligned to support it; and driving improved returns on investment.”

McMullen said the actions are aimed at putting the company's Performance Chemicals operation back on a track of generating improved returns, profitable growth and greater shareholder value.

Omnova said that with the changes, the firm's North American chemical plants will increase SB latex capacity utilization to more than 90 percent from about 62 percent currently.

Its plan to cut costs by $14 million to $17 million includes $4 million of previously announced annual savings from the closure of emulsion polymer manufacturing at its Akron facility, plus $10 million to $13 million related to the new initiatives, the firm said.

As part of the 20-month project involving the Akron plant, some styrene acrylic and other specialty emulsion polymer chemistries were moved from Akron to fill excess SB latex capacity at the Mogadore complex.

The Akron site has remained a finishing facility, dedicated to dry powder manufacturing and packaging to serve its global customer base, the company said.

Omnova also has plants in Chester, S.C.; Fitchburg, Mass.; Caojing and Ningbo, China; Le Havre, France; and Valia, India.