Stepan Co. recently announced plans to cease all production activities and shut down its Longford Mills, Canada, facility by the end of the year. This decision reportedly will result in a workforce reduction of approximately 30 employees. Products manufactured at this facility will be moved to other production sites within Stepan's North American network.
“The decision to close Longford Mills and reduce our workforce was difficult given the skills and commitment of the employees at the site,” said F. Quinn Stepan, Jr., president and CEO. “The plant closure will allow us to improve our asset utilization 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 in North America.”
The total remaining costs associated with the plant shutdown are expected to be $8 million. These costs are expected to be recognized during the final three quarters of the year as incurred. Approximately one-half of the total expected costs reportedly are associated with accelerated depreciation. Other significant cost components relate to severance and plant shutdown expenses, estimated to be $1 million and $3 million, respectively.
For more information, visit www.stepan.com.