Home / Knowledge / News / Textiles / Solutia restructuring Nylon 6.6 business to avert recession gloom
Solutia restructuring Nylon 6.6 business to avert recession gloom
12
Dec '08
With the recession engulfing the market, resulting in rapid deterioration of global economy, Solutia Inc, decided to reduce its cost by 'Vydyne' Nylon 6.6 business.

"The Nylon strategic alternatives process is moving forward as planned, and we continue to make progress on transactional scenarios that would result in the disposition of these assets," said Jeffry N Quinn, Chairman, President and CEO of Solutia Inc. "In the mean time, we are implementing a restructuring plan to position the business for today's dynamic economic environment. This plan will result in an annualized fixed cost reduction of approximately US $40 million, or 10%, across the Nylon business."

Early this year, Solutia announced that it is exploring strategic alternatives for its Nylon business, including a possible sale. Effective with the third quarter of 2008, the company began reporting results from its Nylon segment as discontinued operations.

"In recent years we have matched our manufacturing output and inventory levels with the very strong demand present across the nylon markets," said Jim Voss, Senior Vice President of Solutia Inc and President of the Nylon business. "However, in the last several weeks, demand has declined significantly for nylon intermediate chemicals, fibers and resins. Therefore we are taking necessary actions to align our production and inventories with the current economic environment."

The key component of the restructuring plan is to temporarily decrease production throughout the Nylon chain - from intermediate chemicals to fibers and resins. "We anticipate that this will be a temporary situation, and we will bring these assets back to more normal operating rates as inventories decline and demand returns," added Voss. "We are meeting our customer commitments and will continue to do so going forward."

Additional components of the restructuring plan include a business-wide cost-reduction program as well as the permanent shutdown of significant bulk continuous filament (BCF) carpet fiber assets at the plant in Greenwood, SC. These assets had already been idled earlier this month.

This action is consistent with our transformation strategy for the Nylon business over the past three years," said Voss. "We have now removed nearly all of our dependence on the declining North American carpet fiber market, and are better able to focus our resources on serving the diversified global market for nylon resins and compounds. Our nylon resins and compounds are still the materials of choice in their respective applications, and we anticipate that demand will rebound and demonstrate the long-term viability of this business."

As part of downsizing along the PA production chain, Solutia is laying off nearly 1,600 employees in the US - about half of them permanently.

The financial impact of the restructuring plan includes cash outflows related to the workforce reductions of approximately $5 million total anticipated in the fourth quarter of 2008 and the first quarter of 2009. In addition, the non-cash charge from the permanent closure of the Greenwood assets is approximately $4 million, and will occur in the fourth quarter of 2008.

Must ReadView All

Apparel/Garments | On 28th May 2017

Over 45% US retailers to use AI in next 3 years: Report

Over 45 per cent retailers in the US plan to utilise artificial...

Neelesh Hundekari speaking at the event. Courtesy: Subir Ghosh

Textiles | On 27th May 2017

Fabric of Change initiative announces €250000 scaling fund

The Fabric of Change initiative of Ashoka and the C&A Foundation is...

Apparel/Garments | On 28th May 2017

Naked Brand, Bendon sign agreement to reorganise

Naked Brand Group, a fashion and lifestyle brand, and Bendon Limited, ...

Interviews View All

Kaizad Hansotia
GetNatty

Competition is the best thing that can happen to a startup

Arvind Saraf
Triveni Sarees

e-Commerce is still evolving fast with constant flux and surprises

Sanjay Yagnik
Maa Tex Speciality

‘We suggest reducing dosage of sizing chemicals to reduce sludge...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search