PolyOne to Serve Vinyl Compound Customers Through Centers of Excellence
November 29, 2001
CLEVELAND, Nov 29, 2001 /PRNewswire via COMTEX/ --
* $19 million Investment Signals Commitment to Vinyl Compound Industry * New Equipment Is Focus of Site Upgrades * Advance Notice to Customers Ensures Ample Time for Transition
PolyOne Corporation (NYSE:
POL), the world's largest polymer services company, announced today that it will
create nine Centers of Manufacturing Excellence (CMEs) among its existing vinyl
In a clear sign of long-term commitment to its vinyl compound business, the
Company will invest $19 million in new equipment and processing at the CMEs.
With the improvements, PolyOne expects to retain consistent quality and
competitive pricing, and assure ample capacity to meet customer needs.
Individual production lines at the CMEs will focus on specific vinyl compounds,
which will require production transfers among sites. These transfers and the CME
improvements will occur gradually, with completion targeted for the end of 2002.
With plenty of advance notice to customers, PolyOne anticipates a smooth
With the formation of the vinyl compound CME network, PolyOne will complete the
modernization of the North American operations of Plastic Compounds and Colors
(PCC), its largest business unit.
"We are taking these steps because we are committed to remaining the industry
leader in vinyl compounding," said Chairman and Chief Executive Officer Thomas
A. Waltermire. "To build on our position, we must become an even better
supplier. By investing in vinyl compounding capability for our customers, we
"Before announcing our plans, we conducted a thorough, thoughtful analysis of
all our vinyl compound facilities," Waltermire added. "We will proceed in the
same manner, achieving a phased transition, and seeking full customer approval."
Vinyl Compound CMEs Reinforce Industry Presence
To make vinyl compounds, PolyOne blends vinyl resin with additives chosen for
their particular properties. Liquid additives such as plasticizers make
compounds soft and flexible; impact modifiers make compounds tough and rigid.
After blending, the Company either ships the resulting powder compound directly
to customers, or further processes it into small pellets or cubes before
shipment. PolyOne is regarded as a leader in vinyl compounding and processing
The locations of the nine CMEs and their respective compounding focuses are:
* Avon Lake, Ohio -- rigid and flexible vinyl compounds for the packaging, custom molding and custom profile markets. This CME will produce Food and Drug Administration (FDA) compliant vinyl compounds for packaging and custom profile markets. * Long Beach, California -- rigid and flexible compounds for several West Coast markets. * Louisville, Kentucky -- flexible vinyl for the wire and cable and custom profile markets. * Niagara Falls, Ontario, Canada -- rigid and flexible compounds for the custom profile and automotive markets. Will also retain the capability to make FDA compliant vinyl compounds. * Orangeville, Ontario, Canada -- flexible vinyl for wire and cable; plasticizers. * Pasadena, Texas -- dry blend (powder) compounds. * Plaquemine, Louisiana - dry blend (powder) compounds. * St. Remi de Napierville, Quebec, Canada - dry blend (powder) compounds; plasticizers. * Terre Haute, Indiana -- rigid and flexible compounds for fittings, custom molding and specialty applications. Will also retain FDA capability.
As economic conditions improve, PolyOne has retained many options to expand its
vinyl compounding capacity at many facilities, including the re- opening of
PolyOne's previously idled vinyl compounding facility in Pedricktown, New
The CME network -- coupled with a $25 million investment in 2001 to upgrade
PolyOne's various information technology systems to a single global system
supporting nearly all of its businesses -- will enhance the Company's ability to
meet three top-priority goals: superior-quality products, unmatched customer
service and first-class manufacturing capabilities.
"Several times in the last year, we have announced bold, far-reaching plans to
improve the manufacturing network within our largest North American business
unit. We are doing exactly what we said we would do," said Lance Mitchell,
PolyOne group vice president of Plastic Compounds and Colors. "All these moves,
including the steps we are initiating in vinyl compounds, are part of a
continuum of actions designed to maintain PolyOne's leadership in polymer
Plant Closings to Improve Efficiency
After the vinyl compound CMEs are established and production has been
transferred on a customer-by-customer basis, PolyOne will close its three
remaining vinyl compound sites:
* Burlington, New Jersey -- This site produces rigid vinyl compounds. It also houses a separate Engineered Films operation, which is not part of this announcement, and a small laboratory that provides technical support to customers. The lab will eventually become part of a PolyOne lab in Avon Lake, Ohio and many of its staff will be given the opportunity to relocate. * Farmingdale, New Jersey -- This multi-use site includes a vinyl compound operation, a lab and a commercial office. In time, the lab will be consolidated at Avon Lake, and many employees will be invited to relocate. The on-site commercial office will close, but PolyOne plans to maintain a commercial office in the Northeast. * Valleyfield, Quebec, Canada -- This site produces cross-linked polyethylene as part of the Syncure(TM) product line, which will transfer over time to PolyOne's plant in Macedonia, Ohio.
Committed to Canadian Customers
At its St. Remi facility, PolyOne will close a line that produces vinyl
compounds. St. Remi's dry blend and plasticizer operations, however, will remain
open to serve regional customers.
"We fully intend to continue supporting our Canadian customers," Mitchell said.
"We will maintain a portion of our St. Remi operations, as well as our entire
Niagara Falls site and our Orangeville plant, which will receive some production
transfers from St. Remi. Furthermore, our Resin Distribution business will serve
some of our Canadian customers in Quebec out of St. Remi. So our commitment to
Canada remains strong."
The vinyl compound facility closings will generate an estimated pre-tax earnings
improvement of $21 million annually, beginning in 2003. As some plants expand to
become CMEs, the Company expects about 25 PolyOne people to accept the option to
transfer. As other plants close, there will be a net reduction of approximately
300 manufacturing and salaried jobs.
PolyOne will incur a one-time cash cost of $19 million for facility closings and
an adjustment of $7 million for write-down of the asset carrying value of plants
and equipment. Ultimately, the Company expects to offset a portion of the cash
required with net proceeds from the sale of facilities. Of the $26 million total
cost, fourth quarter 2001 earnings will reflect a pre-tax charge of $22 million.
The remaining $4 million will be recognized over 2002, as one-time cash costs
($2 million), and as accelerated depreciation ($2 million).
PolyOne anticipates investing approximately $45 million by the end of 2002 to
consolidate and upgrade its North American PCC operations, which comprise
engineered materials, colorants and vinyl compounds. When the entire CME network
is functioning, PolyOne will achieve estimated annual pre-tax savings of $40
million to $55 million. In June 2001, the Company announced the locations of
four CMEs to serve its engineered materials customers; in August, it announced
eight CMEs to support its colorant customers.
PolyOne Corporation, with annual revenues approaching $3 billion, is an
international polymer services company with operations in thermoplastic
compounds, specialty vinyl resins, specialty polymer formulations, engineered
films, color and additive systems, elastomer compounding, and thermoplastic
resin distribution. Headquartered in Cleveland, PolyOne has more than 8,000
employees at manufacturing sites in North America, Europe, Asia and Australia,
and joint ventures in North America, South America, Europe, Asia and Australia.
Information on the Company's products and services can be found at
Private Securities Litigation Reform Act of 1995
This release contains statements concerning trends and other forward- looking
information affecting or relating to PolyOne Corporation and its industries that
are intended to qualify for the protections afforded "forward- looking
statements" under the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from such statements for a variety of factors
including, but not limited to: (1) the risk that the former Geon and M.A. Hanna
businesses will not be integrated successfully; (2) an inability to achieve or
delays in achieving savings related to the consolidation and restructuring
programs; (3) unanticipated delays in achieving or inability to achieve cost
reduction and employee productivity goals; (4) costs related to the
consolidation of Geon and M.A. Hanna; (5) the effect on foreign operations of
currency fluctuations, tariffs, nationalization, exchange controls, limitations
on foreign investment in local businesses, and other political, economic and
regulatory risks; (6) unanticipated changes in world, regional or U.S. PVC or
other plastics consumption growth rates affecting the Company's markets; (7)
unanticipated changes in global industry capacity or in the rate at which
anticipated changes in industry capacity come online in the PVC, VCM,
chlor-alkali or other industries in which the Company participates; (8)
fluctuations in raw material prices and supply, and in particular fluctuations
outside the normal range of industry cycles; (9) unanticipated production
outages or material costs associated with scheduled or unscheduled maintenance
programs; (10) unanticipated costs or difficulties and delays related to the
operation of the joint venture entities; (11) lack of day-to-day operating
control, including procurement of raw material feedstocks, of the OxyVinyls
partnership; (12) lack of direct control over the reliability of delivery and
quality of the primary raw materials utilized in the Company's products; (13)
partial control over investment decisions and dividend distribution policy of
the OxyVinyls partnership.
SOURCE PolyOne Corporation
CONTACT: Investor & General Media, Dennis A. Cocco, Chief Investor & Communications Officer, +1-216-589-4018, or email@example.com, or Trade Media, Christopher M. Farage, Director, Communications and Marketing, +1-216-589-4085, or firstname.lastname@example.org , both of PolyOne Corporation URL: http://www.polyone.com