NEWTON FALLS Thermatex to close plant; CSC troubles listed as factor
The company said it had been searching for a buyer since March.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
NEWTON FALLS -- The shutdown of steelmaking giant CSC Ltd. in April has pushed another, smaller manufacturer over the edge. Thermatex Corp. is closing its Warren Avenue plant here and laying off at least 30 workers.
Tim Kenreigh, director of operations, said the Newton Falls Thermatex plant relied on CSC for 30 percent of its business.
Business has also been sluggish for the company's other steel mill customers, he said, while utility costs have climbed.
"There's no one thing that runs a company out of business," Kenreigh said, but the demise of CSC "pretty much put this one to bed."
CSC idled more than 1,300 workers when it closed down its steel bar production mill in Warren a few months after filing for Chapter 11 bankruptcy protection in January. The company hired a Cleveland investment firm to search for a buyer, but an auction scheduled last week to sell the plant was canceled when no qualified bidder emerged.
What's next: Attorneys for the company and its lenders have said that dismantling and a piece-by-piece sale of the mill equipment is the likely next step, unless a buyer steps forward quickly to operate all or part of the mill.
Thermatex produces insulated shapes and boards used primarily in the steel industry and employs 41 hourly and salaried workers.
Headquartered in Newton Falls, Thermatex is a subsidiary of Stonebridge Capital Partners in Pittsburgh and has three other plants: Fast Pack Services Inc. on Elk Road in Canfield, Wahl Refractories Inc. in Fremont, Ohio. and Canadian Ferro Refractories in Ontario, Canada.
Kenreigh said Thermatex closed a fifth plant earlier this year, also because of losses related to CSC and the steel industry in general. Blenco Corp. in Canfield was a powder blending operation that employed three and did 80 percent of its business with CSC.
A few management and accounting department employees from the Newton Falls plant have been offered transfers to its other locations, he said.
He would not comment on severance packages for the laid-off workers, saying that an agreement is still being negotiated.
Limited manufacture: The plant is continuing to manufacture some product to supply its customers until they can find other supply sources, Kenreigh said. Plans are to begin a gradual phaseout in August, and most employees will be furloughed by September.
He acknowledged that Thermatex has looked into the possibility of subleasing its customer base to other companies in Mexico but no contracts have been signed.
Thermatex employees were advised in March that the company was looking for a buyer for the Newton Falls plant, Kenreigh said.
The search was unsuccessful, so the company decided to close the plant and is moving some of its equipment and operations to its other facilities to be used in business not related to steel.
"We're looking to grow and we're looking to increase our market share," he said. "If we can transfer product and keep the business within our own family, we're not going to give it away."