Intertape Polymer Group Announces Plant Closure, Transfers
Intertape Polymer Group Inc., Bradenton, Fla., announced its intention to close its Richmond, Ky., facility and transfer the shrink film production business from the company's Truro, Nova Scotia, facility to its Tremonton, Utah, plant. This will allow it to further optimize its manufacturing footprint and generate significant annual savings.
The Richmond facility, which manufactures tape products, will be closed in part due to productivity improvements in other production facilities. The majority of production will be transferred to Intertape's Carbondale, Ill., facility. The shrink film business in Truro will be transferred to Tremonton, which will create one center of manufacturing excellence in North America. Woven fabric products will continue to be produced at Truro. These changes are expected to be completed in late 2012 and early 2013.
"Considering competitive pressures, market conditions and the volatility of input costs, we are continuously reviewing and analyzing all aspects of our operations. With this plant closure and transfer of production, we expect a positive contribution to Adjusted EBITDA of more than $5 million in 2013 and approximately $6 million in each subsequent year. The process will be seamless to customers and we do not anticipate any significant impact on our revenues," says Greg Yull, president and CEO.
As a result of these initiatives and other smaller aspects of the manufacturing rationalization plan, a charge of $14-$16 million is expected to be recorded in the second quarter of 2012 primarily related to property, plant, equipment and severance. Approximately $1.5 million of this charge relates to cash items and the remainder is non-cash. Additional costs of approximately $3.5 million will also be incurred and paid throughout the second half of 2012 and in early 2013. This initiative will require approximately $5.5 million in capital expenditures, with total company 2012 capital expenditures expected to be $20-23 million.