The Lubrizol Corp. will close its Niagara Falls, Ontario, additives blending, packaging and warehouse facility because of low toll processing volumes and a cost structure considered too high. The company expects operations at the facility to end on June 30, 2009.
Lubrizol spokeswoman Julie Young told Lube Report the Niagara Falls facility sits on 22 acres. The types of additives we blend there are transformer oil, finished motor oil and passenger car heavy duty, Young said.
Over the coming months, Lubrizol said it will seek a potential buyer for the site with assistance from an outside broker. After careful review of its operations and evaluation of different business strategies, the company determined that operation of the facility is not sustainable for the long term, under current and anticipated market conditions, Lubrizol said in yesterdays announcement.
Management determined a shutdown was necessary because of several factors, including the facilitys current and projected toll processing volumes, which are significantly below historical levels, and a cost structure that is too high for current and anticipated business volume.
We are acting now to improve our operational efficiency and effectiveness, given the changing market trends we are facing, as we continue to build a stronger organization for the future, said Larry Norwood, Lubrizol Additives vice president of operations. We will work closely with affected customers to ensure minimal disruption to their businesses.
The Niagara Falls site employs about 30 people, all of whom have been notified of the pending site closure. Some employees will be offered new positions within Lubrizol. The company said it will offer all other employees a severance package and outplacement services.
The Lubrizol Additives sales office in Oakville, Ontario, and the Lubrizol Advanced Materials facility in Waterloo, Ontario, will remain open.
The Niagara Falls site, part of Lubrizol Canada Ltd., has operated since 1953, when it was established to serve the Canadian market as an additive blending, warehousing and bulk terminal operation. Since the early 1990s, the facility has undergone several restructuring activities as a result of capacity rationalization initiatives. The operation now focuses on toll blending, packaging, bulk storage and warehousing of materials.
The plant closure is expected to result in restructuring charges of $10.9 million. Lubrizol expects to recognize $5.6 million of that amount during the second half of 2008.