Solutia sold $227 million worth of its advanced interlayers products in the third quarter of 2011, the most recent data available on the company’s website.
Solutia -- Indian Orchard plant, Springfield.
SPRINGFIELD – There are no plans to add or reduce staff at Solutia’s Indian Orchard plant as a result of Eastman Chemical Co.’s purchase of Solutia for $4.7 billion.
But another corporate takeover, this one of the Cytec Industries’ self-adhesives business at the plant by German chemical company Henkel for $105 million, will cost 50 jobs at the Solutia plant by 2014, said David W. Lahr, plant manager for Solutia in the Indian Orchard section of Springfield.
The self-adhesives business makes pressure-sensitive glues for things such as beer-bottle labels and medical products. Historically, it was part of Monsanto when it owned the 250-acre Indian Orchard chemical plant, Lahr said. Solutia spun off from Monsanto in 1997 and Solutia sold the adhesives business shortly before filing for bankruptcy protection in 2004. But even after the business was sold, about 50 Solutia employees did the production work for the adhesives at the Indian Orchard plant under agreement with Cytec Industries.
“Henkel has other manufacturing assets,” Lahr said. “What kinds of synergy do they have in order to optimize their manufacturing footprint and control costs.”
The Henkel purchase of Cytec became official on Aug. 2.
“What we are doing now is working through all the antitrust concerns,” Lahr said.
Questions submitted to Henkel’s spokespeople went unanswered last week
Lahr said he hopes to be able to find jobs for the adhesives workers elsewhere in Solutia’s, now Eastman Chemical’s, operations at Indian Orchard between now and 2014.
“We have a lot of good people in that business,” Lahr said last week. “We don’t want to lose them.”
Solutia has 425 employees, 65 percent of that in production, 20 percent in management and 15 percent in science and engineering.
Tennessee-based Eastman Chemical Co.’s purchase of Solutia became final July 2. In a written statement, Jim Rogers, chairman and chief executive officer of Eastman said: “The addition of Solutia will broaden our geographic reach into emerging geographies, particularly Asia Pacific, establish a powerful combined platform with extensive organic growth opportunities, and expand our portfolio of sustainable products, all of which are consistent with our growth strategy.”
Monsanto developed Saflex, a plastic layer that holds together and strengthens glass for car windshields and building windows, at the Indian Orchard plant 70 years ago. Saflex is used in the he windows at the federal courthouse in Springfield.
Solutia sold $227 million worth of its advanced interlayers products in the third quarter of 2011, the most recent data available on the company’s website. That’s up from $212 million the same quarter of 2010. Half of that revenue was in sales in Europe, 19 percent in the United States, 9 percent in China, 10 percent in the rest of Asia and 12 percent in the rest of the world.
Aside from Indian Orchard, Solutia has plants making Saflex in Michigan, Mexico, Brazil, Belgium and China, Lahr said.
Eastman doesn’t have any facilities making a similar product to Saflex.
“There is really very little overlap between the Solutia products and the Eastman products,” Lahr sail. “It was a great fit all along.”
He said it will be helpful to be part of a larger chemical company, though. For too many years Solutia was off on its own.
“Eastman has this core skill about being able to create molecules,” he said.
Saflex needs to be shipped to window and windshield manufacturers refrigerated. If it gets warm it sets up and turns into a solid useless hunk of plastic.
So Lahr said it has to be made relatively close to where it is used. A factory in China can’t easily supply a windshield maker stateside.
The overall market for Saflex rises and falls with the economy.
“It’s solid,” Lahr said. “But what is going to happen with automotive manufacturing? What is going to happen with housing and commercial buildings? Are we going to build a lot of commercial buildings in coastal areas where they need this type of glass?”
But Massachusetts, with its high utility costs, is an expensive place to make Saflex. The company has already installed high-efficiency lighting and electric motors.
“We save enough electricity to light the home of everyone who works here,” Lahr said. “But you can only conserve so much. We are competing regionally and globally.”
Also, it’s hard to find new, highly trained chemical workers. In Texas and Louisiana, places where there are a lot of chemical plants, community colleges have dedicated training programs for chemical workers.
On the upside, Lahr said, Solutia can always find scientists and engineers to work at the Indian Orchard plant. Schools including the University of Massachusetts at Amherst, Worcester Polytechnic institute and Rensselaer Polytechnic Institute in Troy, N.Y., feed that talent pool, he said. Â