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Corporate
| May 10, 2006 |
Formica to Invest Up to $25 Million to Enhance Manufacturing, Distribution, and Service Capabilities |
Contact:
Sitrick And Company
Inc.
Jeff Lloyd
Giovanna Falbo
212-573-6100
Formica to Invest Up to $25 Million to Enhance
Manufacturing, Distribution and Service Capabilities
Announces Plans to Cease Operations at Rocklin, California
Facility and to Sell the 211 Acre Site
Cincinnati, Ohio, May 10, 2006 – Formica Corporation today
announced that as part of its ongoing commitment to enhance its
manufacturing, distribution and service capabilities worldwide, the
Company intends to invest up to $25 million in new equipment and
facilities upgrades in North America. The Company also announced
that its plans include the closure of its Sierra facility and sale of the
211 acre Rocklin, California site and that it has initiated discussions
with its union at the Sierra facility concerning these plans and the
effects.
Frank A. Riddick, III, President and Chief Executive Officer of
Formica commented, “Formica has long been known as a design
leader in the surfacing market and we have solidified that reputation
with the introduction of numerous innovative and very successful new
products over the past several years. To extend our market leading
position, our goal is to become the industry’s low-cost producer and
best-service provider. Our Board and our management team are all
committed to doing whatever it takes to make that goal a reality, and making this investment in the business.”
“This investment will allow us to create an operations and service
model that improves flexibility, lead times, and service capabilities.
These initiatives will ensure that we are well-positioned to meet our
customers’ future needs for design-coordinated surfacing solutions,”
Mr. Riddick stated.
In explaining the reasons for ceasing operations at Sierra and putting the site up for sale, Mr. Riddick said, “Our plans to close the facility and sell the site were made after an extensive analysis of our North American manufacturing and distribution footprint and reflect the significant excess HPL capacity within the industry and the relative capital investments required to support our facilities.”
“The employees of the Sierra facility have always worked extremely
hard, and the planned changes are not a reflection on their performance in any way. We are concerned about the impact these plans are going to have on them and intend to treat them fairly and respectfully, as well as assisting them in their transition to future employment as we wind down production over approximately the next twelve months,” Mr. Riddick stated.
He noted, “We want to assure our customers, distributors and suppliers that we will be taking all the necessary steps to maintain and improve the service levels our customers have come to expect as we go forward. To ensure continuity of operations during the transition, we have undertaken extensive planning, dedicated a large project team exclusively to this project and will build additional inventory reserves. We also plan to open a new, more ptimally-located distribution center in order to better serve our Western Region customers. The Sierra facility would not be closed until production has been successfully transferred to other facilities. We are evaluating potential production alternatives and will communicate our decision when our plans are finalized.”
About Formica
Formica Corporation was founded in 1913, and is the preeminent
worldwide manufacturer and marketer of decorative surfacing
materials, including high-pressure laminate and solid surfacing
materials. Additional information about the company is available on
Formica’s Web site at www.formica.com
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