By Patrick Raleigh, ERJ On-line news editor
Middlebury, Connecticut-Crompton Corp. is to carry out a $50-million restructuring of its organizational set up. The plan accompanied the group's second quarter results announcement, which indicated some improvement in the earnings performance of its rubber business.
The group-wide restructuring, to happen later this quarter, will yield annual pre-tax savings of at least $50 million from 2005, according to Bob Wood, the group's chairman, president and chief executive officer.
â€œWe expect to incur a one-time restructuring charge that should not exceed $50 million. It is expected that the bulk of the savings will come from streamlining the organisation and its work processes,â€ Wood added in a 22 July statement.
Crompton's second quarter resulted showed a 22-percent rise in EPDM rubber sales compared to the same period last year. The increase, it said, was mainly due to higher unit volume.
EPDM rubber, along with urethane prepolymers, make up the group's Polymers reporting segment, which posted an operating profit of $11.6 million, compared to $4.8 million in the second quarter of 2003.
Crompton linked the higher Polymers earnings to higher unit volume and selling prices, as well as lower costs due to increased plant throughput and cost saving initiatives. These factors more than offset the impact of higher raw material and energy costs, the group said.
Crompton posted a 14-percent rise in second quarter sales of rubber additives, compared to the same period last year. The increase, it said, was mainly due to higher unit volume sales at the unit, which supplies antioxidants, antiozonants, accelerators, azo blowing agents and waxes.