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Local Solutia Plant Could Be For Sale; Stock Falls $2 On News
July 1, 2008
Changes could be coming for the Solutia plant near Cantonment, even a possible sale of the business.
Solutia Inc. announced Monday that it has retained HSBC Securities (USA) Inc. to explore strategic alternatives with respect to its nylon business, including a possible sale.
“We have transformed our nylon business from a North American-focused fiber business into the world’s second-largest producer of nylon 66 plastics,” commented Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. “The nylon business is on a path for further growth and improvement in financial performance, and we believe strongly in the strategic course we have set for the business.”
“However, given the strength of our high-margin specialty chemical and performance materials businesses and the current industry dynamic in the nylon segment, it is an appropriate time to explore strategic alternatives available with respect to the nylon business that would better position both the nylon business and the rest of Solutia for reaching their ultimate potential,” he added.
While the nylon division’s $1.892 billion in sales account for just over half of Solution’s 2007 income, the company cited the rising cost of raw materials as on reason for the sale. In the first quarter of 2008, the nylon division experienced a 10 percent increase in sales compared to the first quarter of 2007. But the nylon division lost an estimated $7 million for the quarter.
Solutia emerged from bankruptcy just four months ago. The company employs about 1,000 people, many from North Escambia, at their plant near Cantonment.
Shares fell after the announcement Monday to $11.79, down about $2.11 from Friday’s close.
Pictured above: An aerial view of the massive Solutia plant near Cantonment.
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