The Lubrizol Corp. recently announced its decision to close its Chagrin Falls, Ohio, overprint coatings manufacturing facility. The action to end production of Algan overprint coatings and varnishes there is part of the previously announced restructuring of its performance coatings product line, says the company.
“This decision is another step in our continuing effort to improve the performance of our coatings product line and, ultimately, strengthen our ability to be a more valuable partner to our customers,” says Joseph Chai, vice president and general manager, Lubrizol Performance Coatings. “After careful review and evaluation of various business options, it was determined that this facility was not strategic and did not meet the necessary criteria for future growth and profitability.”
The site will cease production as of Jan. 31, 2010. The 35 employees impacted by the closing will receive severance packages and outplacement assistance. Some employees may be relocated to other Lubrizol sites.
The news of the closing came just two days before the Wickliffe, Ohio-based specialty chemical company announced that third-quarter consolidated revenues and volume declined from the prior-year period but increased sequentially for the second consecutive quarter.
Consolidated revenues for the third quarter fell 6% to $1.27 billion compared with $1.36 billion in the third quarter of 2008. The year-over-year decrease in revenues was attributable to lower volumes and unfavorable currency that more than offset an improvement in the combination of price and product mix.
Best results came from the company's Additives and Advanced Materials segments.
"We anticipated potential earnings upside from improved sequential volumes and both segments did benefit from higher than expected shipments," says CEO James Hambrick. "In my opinion, Additives' recent results are best-in-class and represent the level of performance necessary to properly support the type of investments needed for our customers."
The company increased its Sept. 14, 2009, earnings guidance. It now foresees earnings in the range of $6.82 to $7.02 per diluted share, including restructuring and impairment charges of $.28 per diluted share, primarily related to cost reductions initiated in the first quarter of 2009, impaired preliminary process engineering design work and the closure of production facilities.
Regarding the 2009 earnings outlook, Hambrick adds, "Our outlook reflects some upward pressure on raw materials, particularly in Additives where we are already taking appropriate pricing action. Additionally, in this atypical year, forecasting sales volumes for the fourth quarter is more challenging than usual given the potential for year-end inventory reductions by our customers.
"Even with our strong performance this year, we anticipate another year of earnings growth for the corporation in 2010. I believe our performance is sustainable and that earnings will benefit from both broader economic recovery as well as from our organic growth initiatives of product innovation and geographic expansion. We will continue to manage for sustainable growth as we diligently pursue our seventh consecutive year of increased earnings."