As part of its strategy to improve long-term profitability and stockholder returns, Wellman Inc., a manufacturer of a range of polyester products, is combining its Fibers and Recycled Products Groups into one business operation, effective immediately. The new combined group will report to John Hobson, who has been VP of the Recycled Products Group since 1995.
The strategy will be an ongoing process expected to improve profitability, primarily through improved efficiencies and reduced costs. The company plans to review all aspects of its operations, including its organizational structure, cost structure and manufacturing processes.
Thomas Duff, president and CEO, said that despite Wellman's present low-cost structure, the company has not been able to generate satisfactory returns in the polyester fiber and PET packaging resin businesses in the current worldwide market environment. "We are undertaking an initiative to re-examine all aspects of how we do business." said Duff. "The goal is to ensure that Wellman can generate a satisfactory return even at today's depressed margins. We are not willing to wait for an economic recovery in Asia, where ongoing problems have had a significant adverse affect on the worldwide fiber and textile industries, or a cyclical recovery in the PET resins market.''
While it formulates a new business plan reflecting this and other anticipated changes, and in light of present fiber market conditions, Wellman also announced that it will postpone the startup of the polyester staple fiber production line at its new Pearl River Plant in Mississippi. The 230-million-pound line was previously expected to commence operation during the third quarter of 1999. The Pearl River Plant consists of two other world-class production lines, each with annual capacity to produce 235 million pounds of PET resin. The first resin line commenced operation in January 1999; the second resin line is on schedule for startup in the second quarter of 1999.
Wellman Inc. manufactures and markets high-quality polyester products, including Fortrel brand polyester textile fibers, polyester fibers made from recycled raw materials and PermaClear brand PET packaging resins.