A. Schulman Inc. has announced that it is streamlining manufacturing operations at its Crumlin, South Wales (U.K.) production facility, and moving part of the plant's capacity to two other, larger plants in Europe. As a result of the realignment, several production lines at the 74,000 sq ft UK facility will be shut down. Approximately 10,000 tons of masterbatch production will be moved from Crumlin to more cost-efficient, higher-capacity A. Schulman production lines in Bornem, Belgium (147,000 sq. ft.) and Givet, France (243,000 sq. ft.). At the same time, the company will continue to enhance the capabilities of the Crumlin plant to produce smaller lots of colors and other specialty compounds for the local market. As part of this effort, the Company recently invested approximately US$1.2 mln in a continuous mixer for specialized products at the Crumlin facility.
"Our focus on continuous improvement and manufacturing redistribution is essential for enhancing the competitiveness of our European operations," said Bernard Rzepka, A. Schulman General Manager and Chief Operating Officer, Europe. "By moving some production out of Crumlin, we are consolidating capacity to our larger, more efficient Bornem and Givet facilities. At the same time, we are able to refine our Crumlin operations to focus on local demand for smaller lots of colors and other specialty compounds."
The Company anticipates a total annual after-tax benefit of approximately US$0.8-1 mln from the production moves announced above. The Company anticipates taking the following estimated after-tax charges related to the activities outlined above:
Approximately US$400,000 in cash for termination benefits and other employee costs to be taken during the Company's fiscal 2010 fourth quarter.
Approximately US$200,000 from impairment of assets to be taken over the next few quarters.
These items are expected to result in a restructuring cost of approximately US$600,000. A. Schulman also announced two personnel moves in Europe that are consistent with the Company's ongoing integration of operations from its ICO Polymers acquisition. In the U.K., Robert Stanworth, who heads A. Schulman's U.K. operations, assumes responsibility for the ICO Polymers facility in Gainsborough, England. In France, Heinrich Lingnau, business unit leader for ICO Polymers in Europe, becomes responsible for managing ICO Polymers' three production facilities in France, in addition to managing A. Schulman's operations in France.