Press release from PR Newswire
OMNOVA Solutions Announces It Will Repurpose SB Latex Capacity At Its Mogadore, Ohio Performance Chemicals Plant And Save Approximately $4 Million Per Year
Thursday, July 25, 2013
OMNOVA Solutions Announces It Will Repurpose SB Latex Capacity At Its Mogadore, Ohio Performance Chemicals Plant And Save Approximately $4 Million Per Year08:45 EDT Thursday, July 25, 2013
FAIRLAWN, Ohio, July 25, 2013 /PRNewswire/ -- OMNOVA Solutions (NYSE: OMN) announced an investment to repurpose ? or redirect ? excess styrene butadiene (SB) latex capacity at its plant in Mogadore, Ohio to the production of styrene acrylic and other specialty emulsion polymer chemistries. The project will allow OMNOVA to optimize its existing assets and provide significantly greater flexibility to respond to the Company's changing business mix with a wide range of polymers in its Mogadore facility. At the same time, it is expected to improve SB industry capacity utilization.
Following the transition, OMNOVA expects to save approximately $4 million per year in lower operating costs while significantly enhancing its capabilities to serve customers.
As part of the 20-month project, production of styrene acrylics and other latices at OMNOVA's Akron, Ohio site will be transitioned to upgraded, more efficient polymerization assets at the nearby Mogadore plant. The Akron plant will remain a finishing facility, dedicated to dry polymer manufacturing and packaging to serve growing customer demand around the world.
Once the transition is complete, the Mogadore plant ? with capabilities in styrene butadiene, styrene butadiene acrylonitrile, bio-polymers, hollow plastic pigments, acrylics, styrene acrylics, in-mold coatings and fluorosurfactants ? will have the most diverse range of capabilities within OMNOVA's Performance Chemicals business, if not all of the North American specialty polymer industry. At the same time, OMNOVA's Akron plant will continue as a leading producer of dry polymers for several high growth markets, including coatings and oil and gas drilling.
"This action will create efficiencies and quality improvements that will make OMNOVA more competitive," said Jim Hohman, President of OMNOVA's Performance Chemicals segment. "It builds on investments the Company has been making to repurpose styrene butadiene assets and further modernize its manufacturing capabilities to meet changing customer needs. Recently, we completed the conversion of some SB capacity to the production of hollow plastic pigments as well as bio-polymers. All these actions combined will bring OMNOVA's emulsion capacity utilization back near historical levels by taking out approximately 120 million pounds of SB industry capacity.
"Styrene butadiene latex will continue to be an important part of our portfolio, but will be complemented by newer assets in Mogadore to meet the increasing demand for OMNOVA's styrene acrylic products and other chemistries," Hohman added.
As part of the repurposing effort, OMNOVA will upgrade existing polymerization vessels and add new supporting equipment and storage at its Mogadore site. Production of styrene acrylics and other technologies will benefit from OMNOVA's highly advanced process control system in Mogadore, which was installed in 2009 at an investment of approximately $2 million. The Mogadore site also has the industry's newest SB production assets in North America.
Likewise, investments at OMNOVA's Akron plant of approximately $4 million over the past four years have enhanced the Company's leading capabilities in drying and robotic packaging systems.
The production transition will result in a modest workforce reduction which the Company anticipates will be addressed primarily through normal attrition over the 20-month project.
OMNOVA's plants in Mogadore and Akron, Ohio are part of the Company's global network of manufacturing facilities and partner relationships, offering ample capacity for growth in SB latex and other specialty chemicals. OMNOVA has chemical plants in Green Bay, Wisconsin; Calhoun, Georgia; Chester, South Carolina; Fitchburg, Massachusetts; Caojing and Ningbo, China; Le Havre, France; and Valia, India. The Caojing plant is nearing completion of an expansion that will give the Company increased capabilities to produce a wider range of SB emulsion polymer solutions for the fast-growing Asian markets.
This press release includes descriptions of OMNOVA's current business, operations, assets and other matters affecting the Company as well as "forward-looking statements" as defined by federal securities laws. All forward-looking statements by the Company including verbal statements are intended to qualify for the protections afforded forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current expectation, judgment, belief, assumption, estimate or forecast about future events, circumstances or results and may address business conditions and prospects, strategy, capital structure, sales, profits, earnings, markets, products, technology, operations, customers, raw materials, claims and litigations, financial condition, and accounting policies among other matters. Words such as, but not limited to, "will," "may," "should," "projects," "forecasts," "seeks," "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "optimistic," "likely," "would," "could," and similar expressions or phrases identify forward-looking statements.
All descriptions of OMNOVA's current business, operations and assets, as well as all forward-looking statements involve risks and uncertainties. Many risks and uncertainties are inherent in business generally and the markets in which the Company operations or proposes to operate. Other risks and uncertainties are more specific to the Company's businesses including businesses the Company acquires. There may be risks and uncertainties not currently known to us. The occurrence of such risks and uncertainties and the impact of such occurrences is often not predictable or within the Company's control. Such impacts could adversely effect the Company's business, operations or assets as well as the Company's results and, in some cases, such effect could be material. Certain risk factors facing the Company are described below or in the Company's quarterly report Form 10-Q and Annual Report on Form 10-K.
All written and verbal descriptions of OMNOVA's current business, operations and assets and all forward-looking statements attributable to the Company or any person acting on the Company's behalf are expressly qualified in their entirety by the risks, uncertainties, and cautionary statements contained herein. All such descriptions and any forward-looking statement speak only as of the date on which such description or statement is made, and the Company undertakes no obligation, and specifically declines any obligation, other than that imposed by law, to publicly update or revise any such description or forward-looking statements whether as a result of new information, future events or otherwise.
Risks and uncertainties that may adversely impact OMNOVA's business, operations, assets, or other matters affecting the Company, and which may cause actual results to differ materially from expected results include, among others: economic trends and conditions affecting the economy in general and/or the Company's end-use markets; prices and availability of raw materials including styrene, butadiene, vinyl acetate monomer, polyvinyl chloride, acrylonitrile, acrylics and textiles; ability to increase pricing to offset raw material cost increases; product substitution and/or demand destruction due to product technology, performance or cost disadvantages; high degree of customer concentration and potential loss of a significant customer; supplier, customer and/or competitor consolidation; customer credit and bankruptcy risk; failure to successfully develop and commercialize new products; a decrease in regional customer demand due to reduced in-region production or increased import competition; risks associated with international operations including political unrest, fluctuations in exchange rates, and regulatory uncertainty; failure to successfully implement productivity enhancement and cost reduction initiatives; risks associated with chemical handling and manufacturing and with acts of war, terrorism, natural disasters or accidents, including fires, floods, explosions and releases of hazardous substances; unplanned full or partial suspension of plant operations; ability to comply and cost of compliance with legislative and regulatory changes, including changes impacting environmental, health and safety compliance and changes which may restrict or prohibit the Company from using or selling certain products and raw materials; losses from the Company's strategic alliance, joint venture, acquisition, integration and operational activities; rapid inflation in health care costs; loss of key employees and inability to attract and retain new key employees; prolonged work stoppage resulting from labor disputes with unionized workforce; changes in, and significant contributions required to meet, pension plan funding obligations; attacks on and/or failure of the Company's information systems; infringement or loss of the Company's intellectual property; litigation and claims against the Company related to products, services, contracts, employment, environmental, safety, intellectual property and other matters; adverse litigation judgments, settlements or other losses; higher than expected capital expenditures; availability of financing at anticipated rates and terms; and loan covenant default arising from substantial debt and leverage and the inability to service that debt, including increases in applicable short-term or long-term borrowing rates.
For further information on risks and uncertainties, see the Company's Form 10-K and 10-Q filings with the Securities and Exchange Commission.
OMNOVA Solutions Inc. is a technology-based company with sales for the twelve months ending May 31, 2013 of $1.1 billion and a global workforce of approximately 2,300. OMNOVA is an innovator of emulsion polymers, specialty chemicals, and functional and decorative surfaces for a variety of commercial, industrial and residential end uses. Visit OMNOVA Solutions on the internet at www.omnova.com.
SOURCE OMNOVA Solutions Inc.
For further information: Sandi Noah, Communications, (330) 869-4292, Michael Hicks, Investor Relations, (330) 869-4411