05.20.16
Stepan Company will cease all production activities and shutdown its Longford Mills, Canada facility by the end of 2016. The move will eliminate 30 jobs. Stepan products manufactured at this facility will be moved to other production sites within Stepan's existing North American network. The company previously announced the discontinuation of ethoxylation production at the site during the first quarter of 2016.
"The decision to close Longford Mills and reduce our workforce was difficult given the skills and commitment of the employees at the site," said F. Quinn Stepan Jr., president and CEO of Stepan Company. "The plant closure will allow us to improve our asset utilization in North America and further reduce our fixed cost base. We will work closely with our customers to seamlessly transition our supply chain to other Company sites in North America."
The total remaining costs associated with the plant shutdown are expected to be $8 million. These costs are expected to be recognized during the final three quarters of the year as incurred. Approximately one-half of the total expected costs are associated with accelerated depreciation. Other significant cost components relate to severance and plant shutdown expenses, estimated to be
Excluding these charges the company expects to recognize net pre-tax manufacturing savings of less than $1 million in 2016 increasing to $3 million in 2018. These figures reflect preliminary estimates and could change as a result of additional knowledge gathered from executing this decision.
"The decision to close Longford Mills and reduce our workforce was difficult given the skills and commitment of the employees at the site," said F. Quinn Stepan Jr., president and CEO of Stepan Company. "The plant closure will allow us to improve our asset utilization in North America and further reduce our fixed cost base. We will work closely with our customers to seamlessly transition our supply chain to other Company sites in North America."
The total remaining costs associated with the plant shutdown are expected to be $8 million. These costs are expected to be recognized during the final three quarters of the year as incurred. Approximately one-half of the total expected costs are associated with accelerated depreciation. Other significant cost components relate to severance and plant shutdown expenses, estimated to be
Excluding these charges the company expects to recognize net pre-tax manufacturing savings of less than $1 million in 2016 increasing to $3 million in 2018. These figures reflect preliminary estimates and could change as a result of additional knowledge gathered from executing this decision.