Chemtura has announced plans to slim down its operations in Ontario, Canada by consolidating some of a leased grease production facilitys operations and folding a sulfonic acids production site into another location.
The company said it wont renew the lease on its Oakville, Ontario, grease plant, and will consolidate some of its operations into other facilities.
Oakville, which produces lithium and aluminum grease, was significantly underutilized and therefore not cost effective, Chairman and Chief Executive Officer Robert L. Wood said during an earnings conference call on Friday. We will be moving production of our Royco brand lubricants from that facility to West Hanover, New Jersey, where we can more effectively produce these products. The New Jersey plant is home to specialty lubes and grease manufacturer Anderol, which Chemtura acquired in January.
The lease for the Oakville facility expires in May 2008, Mary Ann Dunnell, Chemtura vice president for corporate and financial communications, told Lube Report. The Oakville location has 25 employees, according to Dunnell.
Wood said the company also plans to consolidate its Scarborough, Ontario, facility into its West Hill, Ontario, plant and to sell surplus land and office buildings at the West Hill facility. The Scarborough facility has 10 employees, Dunnell said.
What Scarborough makes are sulfonic acids, an intermediate product thats used by West Hill, she explained. So now instead of trucking it back and forth, theyre going to consolidate the facilities. What West Hill makes are lube oil additives and lubricating greases.
Chairman and CEO Wood said the companys direct ownership of 40 facilities worldwide provides other opportunities to reduce manufacturing costs and align production with customer needs and market growth. As our businesses hone their strategies for growth and operating effectiveness, we will take additional actions based on hard economic analysis, he said. All of these actions are focused on managing what we can directly control.
According to Chemturas second quarter earnings release issued last Thursday, it had announced the plans for the Canadian locations on July 27.
On April 4 Chemtura announced a major restructuring, including the elimination of about 10 percent of its global workforce(some 620 positions), resulting in an annualized cost reduction of about $50 million starting in 2008. The restructuring plan included reevaulating the companys manufacturing footprint and redirecting efforts to focus on end-use markets.
Chemtura supplies a wide range of petroleum additive components and base stocks to the lubricants industry, claiming to account for 12 percent of the former worldwide. Based in Middlebury, Conn., Chemtura’s additives for the lubricants industry include antioxidants, antiwear additives, corrosion inhibitors, dispersants, emulsifiers, extreme pressure additives, grease thickening components, lubricating additives and viscosity modifiers.