Nov 4 2008
James Hardie today announced plans to suspend production at its Fontana, California plant in response to the continued deterioration in the US housing market. Production at its Summerville, South Carolina plant is also being suspended. To ensure that the company has adequate supply of material to the East Coast markets once Summerville has shut down, the second line at the Pulaski, Virginia plant will be commissioned.
James Hardie’s CEO, Louis Gries, said: “The continuing decline in the US housing market has led to reduced capacity utilization of our US manufacturing plants. Although the business continues to run well, current and projected market demand cannot support our current plant network.”
The Fontana manufacturing plant has an annual production capacity of 175 million square feet but has been running at reduced operating levels since the market downturn. Production has been suspended at this plant because of the reduction in demand in the core area it services in the US southwest. The plant employs 60 people.
The Summerville manufacturing plant has also been running at reduced operating levels. The plant will re-open when market demand returns to acceptable levels. During the shut-down, the appropriate future product mix for the plant will be determined, potentially incorporating some of the company’s newer differentiated products. The Summerville plant employs 67 people.
Mr Gries said: “Today’s decision is extremely difficult because it affects 127 of our employees. However, it is no reflection on their achievements and dedication. It is a reflection of the severe housing market downturn.”
The company will not be booking impairment charges against these closures as it intends to re-open both plants when market conditions permit.