SENNINGERBERG, Luxembourg—Orion Engineered Carbons plans to consolidate its South Korea carbon black manufacturing operations into one facility.
The firm will close its plant in Bupyeong and consolidate its operations into its plant in Yeosu during the next 20 months, the firm said in a Nov. 4 news release.
When completed, Bupyeong will be dismantled for commercial and residential use. It has the capacity for 45,000 metric tons of carbon black and employs 38.
Orion CEO Jack Clem said in a statement that the pressures of high labor costs, cost and availability of raw material feedstocks, and the company's need to continue improving the productivity of its production network were the major drivers of the decision. Details are to be finalized by the end of 2016.
He added in an email that Orion has informed the work force and the local unions of its plans and will engage in negotiations on transfer opportunities and other restructuring options during the next several months.
“The initiative in (South) Korea is not about closing a plant but is instead targeted at strengthening our production network by consolidating a smaller plant into our larger facility at Yeosu,” Clem said.
“Compared to the Bupyeong plant, our Yeosu facility is located in a highly developed industrial complex and is fully integrated into the cogeneration, harboring and utilities systems of that complex. When completed, we expect our Korean carbon black production capacity for specialty and technical rubber goods to be at least equal to, if not greater than, current.”
Clem said the firm already has converted one of the lines at Yeosu to produce specialty carbon black. The consolidation also will take some additional STM rubber black capacity out of the Asian market.