Unfortunately, not all stories come with happy endings. That appears to be the case with East West Copolymer L.L.C., the synthetic rubber factory located in Baton Rouge, La.
When a group of managers joined with two groups of Asian investors in 2014, it was clear the road to success would be difficult, but definitely achievable. And it was an effort worth rooting for, with the potential to save at least a portion of the jobs at the historic plant.
After all, the facility dates back to the birth of the U.S. synthetic rubber industry during World War II. It was part of the effort where the federal government teamed with a group of tire and rubber companies to create a synthetic rubber alternative to natural rubber, as NR supplies were dwindling during the war.
The facility began life as Copolymer Corp., and Copolymer began independent operations at the emulsion SBR facility in 1955 when the government sold the SR facilities to private industry. It added nitrile rubber to its mix by 1965, and had numerous owners over the years. Owners ranged from Sears, Roebuck and Co., Gates Rubber and Armstrong Rubber to Armtek, DSM and Lion Copolymer.
In late 2013 Lion Copolymer said it would "temporarily" close the facility and concentrate on its EPDM business in nearby Geismar, La.
In early 2014, Greg Nelson, CEO of Lion Copolymer for six years, helped put together the group to purchase the Baton Rouge factory, serving as president and CEO of East West Copolymer.
As recent as a year ago, the effort seemed to be succeeding. The company had revived the NBR part of the facility along with the ESBR output. Nelson said it also had regained its customer base, fashioned a new union contract and brought on a major investor, Main Street Capital Corp., which provided $12 million.
But the SR business is not for the faint of heart. There are overcapacity problems in many synthetic rubber product areas, and raw material and other cost fluctuations can quickly cut into razor-thin margins.
That is a climate in which East West may have come to the point where survival was not possible. A union official at the plant said about 110 workers were laid off, with a maintenance crew still on hand performing shutdown operations.
The firm's Chapter 11 U.S. Bankruptcy Court filing listed assets of just $1 million to $10 million, with liabilities of $10 million to $50 million, with $13.5 million of that owed to Main Street Capital.
With the anticipated closure goes the hope and optimism that greeted East West as a potential savior, along with another piece of rubber industry history.