A. Schulman To Close Stryker Plant As Part Of North American Plant Consolidation

(RTTNews) - Resin maker A. Schulmanm, Inc (SHLM) announced Monday the planned closure and shift of production from its Stryker, Ohio facility as part of its restructuring actions in order to realign manufacturing operations in its Americas segment to improve capacity utilization.

The Stryker facility was part of the company's acquisition of the Ferro Specialty Plastics Business, which was completed in July 2014. The Stryker plant has been producing products primarily for markets in the U.S. and Mexico, employing about 70 people.

"While demand remains strong in the U.S., our recent acquisitions have added seven plants over the past three years. Based on our evaluation of a variety of factors including capacity utilization, location and laboratory and manufacturing capabilities, we have decided to consolidate our North American production capacity to drive efficiencies," Chief Operating Officer Bernard Rzepka said in a statement.

Schulman is a supplier of plastic compounds and resins for packaging, automotive, consumer products, and industrial applications.

The Akron, Ohio-based company said it is consolidating its North American production facilities following the ongoing review of its manufacturing footprint.

The company plans to close the Stryker plant in April 2015 and shift the plant's production to other facilities in North America.

The ongoing review of its manufacturing footprint focuses on driving further synergies from recent acquisitions through SG&A reductions in North America and elimination of duplicate functions. The could also lead to headcount reductions at various locations totaling about 10 people.

"This is a difficult decision, but the consolidation illustrates our enduring commitment to right-sizing our global capacity to best serve customers and allow for profitable growth in key markets. In addition to evaluating our manufacturing footprint, we continually look for other ways to improve efficiency and have identified further opportunities to achieve additional savings by streamlining our back office operations in the U.S.," Rzepka added.

The company noted that its expects to incur manufacturing consolidation costs of about $2.5 million and SG&A efficiency costs of about $0.50 million in the first quarter of fiscal 2015.

Meanwhile, it projects annualized savings from manufacturing consolidation of about $3 million be to realized in the second half of fiscal 2015, and annualized savings from SG&A reductions of about $1 million to start being realized in second quarter of fiscal 2015.

The company added that a part of the manufacturing consolidation savings were part of the previously stated $5.5 million in net synergies related to the acquisition of Ferro's Specialty Plastics business.

SHLM closed Friday's regular trading session at $37.11, up $0.04 on a volume of 0.12 million shares.