Performance Fibers Inc. to stay competitive in the current challenging environment has decided to close its polyester tire yarn plant in North Carolina over the coming 12 to 15 months and transfer its production to its second plant in Salisbury N.C.
The plant in Salisbury, N.C. has the capability and capacity to absorb all of the customer volume with surplus capacity and space to grow.
The transfer is part of "transformation" process the manufacturer of industrial and tire reinforcement fibers and fabrics are undergoing to address competitive issues. The process will involve an investment of $25 million. The sites are about 110 miles apart.
According to Performance Fibers, over half of the tires purchased in the U.S. are coming from imports rather than domestic production. U.S. tire manufacturers are core customers to their North American production assets, and they are facing considerable and growing competitive pressure as a total supply chain.
Performance Fibers faces a double impact with offshore competitors offering similar reinforcement products at lower prices imported into the North American market. These same market forces are also at play in Europe.
To remain competitive in the face of this double impact, Performance Fibers is said to invest $25 million over the next 21 months to rationalize its footprint in North America, modernize equipment in North American and Europe, make step-change improvements in product quality and create â€œa product development center of excellence.
They are confident that their associates in North American can compete effectively in a global marketplace, but they have been handicapped by low utilizations at multiple plant sites making cost efficiency difficult and investments all but impossible.
Their main goal in this transformation is to combine their key learnings from all of their global yarn operations with the best polymer and spinning platform and with state of the art winding capability into a single site in North America to ensure that PF is among the very best in the global terms of cost, quality and service.
Their decision to concentrate on yarn production into Salisbury gives them the ability to make investment and process changes much more powerful. The transformation process will give Performance Fibers the ability to compete effectively with any producer anywhere in the world.
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