Specialty compounding, colorant, and distribution giant PolyOne announced that it will close eight production facilities and eliminate a net 150 positions by the end of Q1 2009. Seven North American facilities slated for closure are: Avon Lake, OH (Building 452); Commerce, CA; Macedonia, OH; Plaquemine, LA; St. Peters, MO; Sussex, WI; and Valleyfield, QC, Canada. Outside North America, the U.K. facility in Bolton, Lancashire will also be shuttered.

David Honeycutt, Director, Marketing Communications, tells IMM that PolyOne will shift production from these facilities to several of the 30-plus plants remaining, and will invest $12 million in additional capital at these remaining locations to support the shift. Ongoing total net savings is estimated at $17 million per year.

“Our goal is to ensure that our operations are as configured as efficiently as possible, especially in light of softer demand. To do that, we have to eliminate capacity we don't need at plants that are significantly below acceptable utilization levels,” Honeycutt says. “The downturn in demand will help us to make these changes, which have made sense for some time, with minimal disruption for our customers.”

Many of the plants to be closed are former acquisitions that were part of an aggregation strategy in place before M.A. Hanna and Geon merged to become PolyOne eight years ago. With PolyOne's current focus on global operational efficiency and specialty products rather than commodities, its asset configuration needs have changed, according to Honeycutt.

Stephen Newlin, chairman, president and CEO, says, “The recent unprecedented increases in raw material and energy costs, and longer-term fundamental changes in the global economy were critical factors in our decision-making. Declining demand in markets such as housing and automotive has created a timely opportunity to remove excess capacity and address supply chain efficiencies as important steps in mitigating the effects of the current economic conditions on PolyOne and its customers.”