Albemarle announces plans to exit phosphorous flame retardants business
In order to restructure its business portfolio and address underperforming assets, Albemarle Corporation announced that it plans to exit its existing phosphorous flame retardants business. Albemarle currently produces phosphorus flame retardants, part of its Polymer Solutions business segment, at its Avonmouth, United Kingdom and Nanjing, China manufacturing sites. The proposal to exit the business and cease operations at the Avonmouth, UK site is subject to consultation with its employees, which has begun. In addition, the process to cease operations at the Nanjing, China site has also begun.
The cash outlay related to the above proposals is expected to be in the range of $5 million to $15 million with payback in approximately one year. As a consequence of these plans, the company would expect to incur a one-time after-tax accounting charge in the range of $80 million to $95 million in the second quarter 2012, which would include costs such as severance, asset write-downs and closure costs. Once these actions are completed, including a restructuring program intended to eliminate costs allocated to the phosphorus business, annual earnings per share should improve by $0.10 to $0.15 per share in 2013.
"One of the fundamental drivers of Albemarle's future growth is our ability to manage our business portfolio and show discipline in addressing underperforming assets or product lines. It has become clear that our current phosphorus business and product lines are not strategically aligned with Vision 2015's growth plans," commented Luke Kissam, Albemarle's Chief Executive Officer. "We recognize the impact a proposed closure would have on our employees, their families and the communities where they live, and we will strive to minimize this impact," added Kissam.
Subject to the conclusion of the consultation process in the UK, production at both facilities will cease upon completion of customer contracts.
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