Consumables
A. Schulman Continues To Strategically Realign Its Global Operations
Tuesday 28. May 2013 - - Announces further restructuring in Europe to bring total annual run rate savings to approximately $10 million
– Intends to sell Australian business; will continue focusing on profitable growth opportunities in APAC region
A. Schulman, Inc. (Nasdaq-GS: SHLM) today announced further restructuring plans in its Europe, Middle East and Africa (EMEA) region, due to the economic climate in Europe. As part of this restructuring, the EMEA regional team plans to reduce headcount. This further restructuring is expected to generate approximately $4 million in annual run rate savings.
“Given the ongoing poor economic environment in Europe, we felt it was necessary to continue our current restructuring efforts and expense reductions to better align with market demand,” said Bernard Rzepka, Executive Vice President and Chief Operating Officer of A. Schulman. “Since 2010, we have executed a series of cost reduction programs in Europe. Over the past three years, these actions have provided more than $6 million in annual run rate savings, and the additional actions we are announcing today are expected to bring that total to approximately $10 million. While these actions are never easy, we continue to aggressively manage our operations to strengthen our strategic and financial position in the region. We do not expect any interruptions in service to customers resulting from these actions.”
“We have confidence in the long-term strength of our EMEA business, and we continue to focus on growth opportunities in markets such as the Middle East, Turkey and Russia,” said Joseph M. Gingo, Chairman, President and Chief Executive Officer. “Our overall strategy has always been to control what we can control and take quick action in response to market forces, as we continue to pursue further acquisitions and advance our position as a global specialty chemicals company.”
Additionally, A. Schulman announced that it intends to sell its rotational compounding business in Brisbane, Australia. The Company will reflect the results of this business as discontinued operations in all future financial statements. The operating results for this business were previously included in the Company’s Asia Pacific (APAC) segment. The Company plans to engage a financial advisor to assist in selling the business and expects to complete a sale within six to 12 months. This Australian business recorded revenue of approximately $25 million for fiscal 2012.
“This business has represented a very small portion of our portfolio, and we have been challenged to sustain profitability in the smaller Australian market despite the strategic restructuring programs we have implemented in recent years,” Gingo said. “After careful consideration, we have committed to finding a suitable buyer for this business. This move will allow our APAC team to focus on our considerable opportunities in profitable growth markets and seek out further strategic acquisitions in the region, including Australia.”