AirBoss consolidates operations amid weak results

Newmarket, Ontario – Canadian compounder AirBoss of America Corp. has launched a major restructuring of its operations, under which all rubber compounding activities will be consolidated into a single segment.

Effective as of 31 Dec 2023, the reorganisation will streamline AirBoss operations into two segments of AirBoss Rubber Solutions (ARS) and AirBoss Manufactured Products (AMP), the company announced 7 March.

The ARS segment will consist of the former rubber solutions segment and the rubber compounding operations at Acton Vale, Quebec.

The new AMP segment will consist formerly standalone operations AirBoss Engineered Products, formerly a standalone segment, and AirBoss Defense Group.

The AMP segment will consolidate “all operations which manufacture or distribute finished products to a variety of target markets including automotive, non-automotive and defence,” he added.

As part of the process, AirBoss will also undertake an “in-depth strategic review” of all AMP’s individual product lines to assess “their overall alignment with the new strategic direction of AirBoss.”

The reorganisation programme was introduced following a year of weak performance by the custom compounder, which reported a 40% year-on-year decline in adjusted earnings (EBITDA) to $26.8 million.

Net sales fell nearly 11% to $426 million, and group loss widened further to $41.7, from $32 million reported the year before.

AirBoss linked the performance to the impact of economic headwinds, “fuelled by labour stoppages in the auto sector and continued delays in government sourcing”.

“Our businesses and the markets in which we operate continue to experience significant change, and we believe our shift in strategic focus will help prioritise investments,” added Gren Schoch, chairman and Co-CEO.

The group, he added, will “continue to explore implementing further cost reduction initiatives within our business units in 2024.”

In the long-term, AirBoss said it aimed to grow the core Rubber Solutions segment, leveraging rubber compounding as the “core driver” for sustainable growth and productivity.

The group said it would focus on “innovation in custom rubber compounding while aiming to expand market share through organic and inorganic means.”

Manufactured Products growth strategy will be focused on diversifying and expanding the group’s range of rubber moulded products while narrowing the range of defence.