Stepan to close Longford Mills facility in Canada
US-based manufacturer of specialty chemicals Stepan Company is planning to close production at its facility in Longford Mills, Canada, by the end of this year.
The company noted that the products manufactured at this facility will be moved to other production sites within its existing North American network.
In the first quarter of this year, the company had discontinued ethoxylation production at the site.
The closure of the facility would result in a workforce reduction of about 30 employees.
Stepan Company president and CEO Quinn Stepan said: "The decision to close Longford Mills and reduce our workforce was difficult given the skills and commitment of the employees at the site.
"The plant closure will allow us to improve our asset utilisation 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 within North America."
The total remaining costs associated with the plant closure is projected to be $8m and these costs are anticipated to be recognised during the final three quarters of the year as incurred.
Around one-half of the total expected costs are related with accelerated depreciation.
Other significant cost components reportedly relating to severance and facility closure expenditure are estimated to be $1m and $3m, respectively.
In addition to these expenditures, the company intends to recognise net pre-tax manufacturing savings of less than $1m in 2016, increasing to $3m in 2018.