US-based Constar International has announced that it is consolidating plant operations, specifically closing its Orlando, Florida and Kansas City, Kansas facilities, as well as taking salaried headcount reductions in its corporate ranks.
In connection with the restructuring actions, the company expects to incur total pre-tax restructuring charges of approximately $7 – $10m with approximately $6m expected to be recorded in the fourth quarter of 2010 and the remainder to be recorded over the next several subsequent quarters.
The total charges include an estimated $5m related to contract termination costs, an estimated $1m related to employee severance and other termination benefits, and an estimated $3m of other associated costs. In addition, the company expects to record total accelerated depreciation and other non-cash charges of approximately $18m with approximately $15m recorded in the fourth quarter of 2010 and the remainder to be recorded in 2011. The majority of the restructuring actions are expected to be completed by the end of 2011. Upon completing these actions, the company estimates annual cost savings of approximately $22m.
The Orlando facility is expected to close at the end of this year, while the Kansas City plant is expected to close in the first quarter of 2011. Customers of these plants will be served by other Constar plants without interruption in supply, quality or service.