The Lubrizol Corporation announced July 29 its decision to close its Niagara Falls, Ontario, facility, a Lubrizol Additives blending, packaging and warehouse site. After careful review of its operations and evaluation of different business strategies, the company determined that operation of the facility is not sustainable for the long term, under current and anticipated market conditions. Operations at the facility are expected to end by June 30, 2009. The Lubrizol Additives sales office in Oakville, Ontario, and the Lubrizol Advanced Materials facility in Waterloo, Ontario, will remain open.
The Niagara Falls site, part of Lubrizol Canada Limited, has been in operation since 1953 and was established to serve the Canadian market as an additive blending, warehousing and bulk terminal operation. Since the early 1990s, the facility has undergone several restructuring activities as a result of capacity rationalization initiatives. The operation currently focuses on toll blending, packaging, bulk storage and warehousing of materials.
After conducting a thorough business analysis, management determined that a shutdown of the facility was required based on several factors, including the facility's current and projected toll processing volumes, which are significantly below historical levels, and a cost structure that is too high for current and anticipated business volume.
"We are acting now to improve our operational efficiency and effectiveness, given the changing market trends we are facing, as we continue to build a stronger organization for the future," said Larry Norwood, Lubrizol Additives vice president of operations. "We will work closely with affected customers to ensure minimal disruption to their businesses. Our Niagara Falls employees have worked hard to keep the site viable in the face of numerous market challenges, and this decision in no way reflects the quality of their work."
The Niagara Falls site employs approximately 30 people, all of whom have been notified of the pending site closure. Some employees will be offered new positions within Lubrizol. All other employees will be offered a severance package and outplacement services.
Over the coming months, Lubrizol will seek a potential buyer for the site with assistance from an outside broker.
The plant closure is expected to result in restructuring charges of approximately $10.9 million, of which $5.6 million is expected to be recognized during the second half of 2008.
About The Lubrizol Corporation
The Lubrizol Corporation is an innovative specialty chemical company that produces and supplies technologies that improve the quality and performance of customers' products in the global transportation, industrial and consumer markets. These technologies include lubricant additives for engine oils, other transportation-related fluids and industrial lubricants, as well as fuel additives for gasoline and diesel fuel. In addition, Lubrizol makes ingredients and additives for personal care products and pharmaceuticals; specialty materials, including plastics technology and performance coatings in the form of specialty resins and additives. Lubrizol's industry-leading technologies in additives, ingredients and compounds enhance the quality, performance and value of customers' products, while reducing their environmental impact. With headquarters in Wickliffe, Ohio, The Lubrizol Corporation owns and operates manufacturing facilities in 19 countries, as well as sales and technical offices around the world. Founded in 1928, Lubrizol has approximately 6,900 employees worldwide. Revenues for 2007 were $4.5 billion.
