Milacon Inc. said last week that it plans to discontinue its round tool and grinding wheel operations, the last pieces of its metalworking tools business.
The company said it will now give more focus to its metalworking fluids business, as well as its ongoing supply of plastics processing machinery and supplies. Officials said they do not expect the exit from metalworking tools to affect the fluids business even though the former has been cited as a source of know-how in the development and use of fluids.
We certainly don t think it will have an impact, said Gregory J. Foltz, product manager for the Cimcool brand of fluids. We plan to continue taking the same approach to that business that we always have.
Until last summer, Milacron s Metalworking Technologies division covered a broad range of consumable implements used in a variety of metalworking applications, as well as the fluids used in such applications. In August, the Cincinnati, Ohio, company sold its Valenite, Widia and Werko businesses, which made tools for metalcutting.
In reporting its third quarter financial performance Thursday, the company announced that it has now classified round tools and grinding wheels as discontinued. Management avoided saying that those operations will be sold, stating that it intends to find strategic solutions for those businesses in the near future. Chairman and Chief Executive Officer Ronald D. Brown noted that round tools and grinding wheels have been losing money.
The remaining division, renamed Industrial Fluids, is one of the world s largest suppliers of metalworking fluids. It has blending facilities in North America, Europe and Asia and sells its products under a variety of brands in 100 countries around the world. Annual sales amount to $100 million, according to a presentation given by Brown in June.
Milacron has claimed that its fluids operations derived an advantage from the fact that it was the market s only major supplier that also made implements.
That was a uniqueness that we had, Foltz said Monday. While other companies may have sold a broad range of chemicals used in metalworking, we actually sold a whole line of metal removal items. And being in both sides of the business gave us a better understanding of how they work together.
Foltz maintained that Milacron will continue developing its expertise on the interaction between various parts of metalworking processes.
We ve always been process oriented, he said. That s still going to be our mentality.
Eli Lustgarten, who tracks Milacron for H.C. Wainwright and Co., of New York City, said he did not expect the exit from tools to affect the fluids business. Fluids has been a very strong business, while round tools and grinding wheels have not been a great business to be in, he said. There may have been something to their claim that there was a synergy between the two. But the reality is that they ve been under financial pressures, and that s probably why they sold off their tools business.
Milacron has been losing money for the past several quarters due to slowdowns in manufacturing and steps taken to restructure. For the quarter ended Sept. 30, the company posted a $3.4 million loss from continuing operations, compared to a loss of $7.3 million during the same period of 2001. Brown said sales have at least stabilized, although the company is still awaiting signs of recovery.