Effective Monday, May 3, Boltaron Performance Products LLC of Newcomerstown entered into a transaction to sell its print stock business, including the manufacturing equipment, proprietary technology, formulation, and trade names to Klockner Pentaplast of Gordonsville, Va.
This sale will result in the immediate shutting down of their calendar lines 1 and 3 and the removal of that equipment from the facility to their competitor's location within the next four months. Based upon this sale and their reduced labor requirements, Boltaron reorganized their staffing based upon the needs of their business going forward and the skill sets required for the optimum performance of their continuing operations. This unfortunately meant that 21 employees were laid off. Production started back up on May 4 with 80 percent of the workforce returning.
Those laid off will receive severance benefits including salary continuation, health insurance and outplacement counseling. In addition, they will receive their accrued vacation pay and unemployment insurance as required by law.
Reason for the sale
Boltaron invested heavily in their calendar business in the form of an upgrade to Calendar Line 3 in 2007-2008. That investment was based upon the assumption that increased speed and quality would help them grow market share and maintain profitability. Although those goals were partially reached, they suffered great losses in 2008 that, together with the general economic downturn and banking crisis, resulted in great pressure to the long-term financial prospects in the business. The dramatic increase in raw material costs encountered in 2008 was too great to be offset by the increased productivity of Line 3.
And though for part of 2009 raw material prices declined and profitability returned, the last six months has resulted in dramatic raw material price increases once again that they could not offset with productivity or selling price increases to their customers. In addition to all this, their Print Stock customer base continued to decrease with business failures, consolidation and general weakness and slow payment issues. In the face of these conditions, Larry Schorr, CEO, concluded that the long-term viability of this business was not good and that the only rational economic decision for this industry was further consolidation amongst their competitors. Fortunately, a much larger competitor of Boltaron saw the value of what they had built in terms of technology and market share and was willing to enter into this transaction that will result in the relocation of the Print Stock business to its facilities in the U.S. and overseas.
Future of Boltaron's business
With the exiting of the Print Stock business, Boltaron, however, will continue their Industrial business, comprised of their extrusion lines, calendar 2 and their presses, as well as their facility in Newcomerstown. In fact, they intend to invest heavily in that business to expand their capabilities, customer base and international reach. They believe there is a good future in this business. Although in some ways this will be a step back in terms of total employment and total volume, they believe that it will within a couple of years or so be a big step forward.
Boltaron produces high performance, monolithic and composite film and sheet products in 50 specialized grades in unlimited colors, patterns and textures, in gauges from 6 mil to 4 inches. It is the only U.S. manufacturer with calendaring, extrusion and press laminating under one roof.
(Shirley A. Osler is the director of Human Resources at Boltaron Performance Products LLC of Newcomerstown.)