BERWYN, Pa.—Trinseo S.A. will close a styrene butadiene latex production plant and upgrade another to help improve its cost structure in North America.
By year end, the company's facility in Gales Ferry, Conn., will be shut down. It will be decommissioned and demolished in 2016.
Beginning in 2016, customers who were supplied styrene butadiene latex from the Gales Ferry site will be handled by rubber latex facilities in Midland, Mich., and Dalton, Ga. The Midland plant will be upgraded, but no changes are planned at the Georgia site.
About 17 employees at the Gates Ferry factory will be impacted by the closure, a spokeswoman for the Berwyn-headquartered firm said.
“There are 21 employees at the Connecticut plant,” she said. “Seventeen employees are aligned with the latex operations and are eligible to receive a separation package. One employee will be offered a role at another location.”
Three other employees with other departments, including corporate services/manufacturing, will continue in their present roles with new office arrangements to be determined in 2016, she said.
Trinseo, which changed its name from Styron L.L.C. in February, is closing the styrene butadiene latex plant because of continuing declines in the coated paper industry in North America, according to Jan Miller, global business director of binders.
By eliminating the Gales Ferry site, the company expects to cut costs in the business by a $5 million run rate, after all cost-savings initiatives have been completed in 2016. It will give the firm 18 manufacturing sites spread around the world rather than the present 19.
Other cost reduction projects in the latex segment are possible, but projects or time frames have not been announced.
Given the continued decline in the paper industry globally, the spokeswoman said, “We are continuously evaluating other cost reductions in the latex business in all regions.”
The current changes “will improve our cost position in North America and increase our asset utilization rates to approximately 85 percent,” Miller said.
Meanwhile, the company will make capital investments in its Midland plant to enhance the building's production and storage capabilities.
“The capital improvements will improve reliability and flexibility at Midland,” the spokeswoman said. “Specifically, the capital will go toward enhancing the capabilities of each of the reactors in Midland, as well as supply chain capabilities.”
Additional employees will not be needed at the site. Financial details on the investment in the upgrade were not released.