CLAYTON, MO,
Dec. 10, 2010
(PRNewswire-FirstCall) -
Olin Corporation announced today that its fourth quarter 2010 results will contain approximately $30 million of pretax restructuring charges. These charges are associated with implementation of plans to exit the use of mercury cell technology in the chlor alkali manufacturing process by the end of 2012 and the relocation of its Winchester centerfire ammunition manufacturing operations from East Alton, Illinois to Oxford, Mississippi. Approximately 70 percent of these restructuring charges represent non cash pension curtailment charges and asset impairments. The cash component of these charges includes employee related costs and contract terminations associated with the Augusta and Charleston mercury cell facilities.
Joseph D. Rupp, Chairman, President and Chief Executive Officer said, "On December 9 our Board of Directors approved a plan to convert the 260,000 tons of mercury cell capacity at our Charleston, Tennessee facility to 200,000 tons of membrane capacity capable of producing both potassium hydroxide and caustic soda. The project has an estimated capital cost of approximately $160 million and will be completed by the end of 2012. In addition, we intend to reconfigure our Augusta, Georgia facility to manufacture bleach and distribute caustic soda, while discontinuing chlor alkali manufacturing at this site. This action will further reduce our chlor alkali manufacturing capacity by 100,000 tons.
"The new Charleston plant will employ the most modern membrane technology, have lower operating costs, and will produce higher quality products. Over the past eighteen months we have experienced a steady increase in the number of our customers unwilling to accept our products manufactured using mercury cell technology. The conversion of the Charleston facility, which in addition to chlorine and caustic soda also produces potassium hydroxide, hydrochloric acid, and bleach, will prevent the potential loss of these valuable customers." Rupp also cited the actions of state and local officials in Tennessee to make available a series of financial incentives that were important in this decision making process.
"On November 3, 2010 we announced that we had made the decision to relocate Winchester centerfire ammunition operations from East Alton, Illinois to Oxford, Mississippi. This relocation, when completed, is forecast to reduce Winchester's annual operating costs by approximately $30 million. Consistent with this decision we have initiated an estimated $110 million five-year project, which includes approximately $80 million of capital spending. The State of Mississippi and local governments have provided generous incentives which should offset approximately 40 percent of the capital spending. This project is expected to increase Olin's 2011 net capital spending by approximately $30 million."
During the fourth quarter of 2010, $41 million of Tennessee-sponsored tax exempt variable rate Recovery Zone Facility bonds and $42 million of Mississippi-sponsored tax exempt variable rate Recovery Zone Facility bonds will be issued with final maturities exceeding 15 years. The proceeds from these bonds are required to be used to fund the Charleston, Tennessee capital project and the Oxford, Mississippi Winchester relocation.
Olin expects to issue a press release, including financial statements and segment information, regarding its fourth quarter 2010 earnings after the market closes on Monday, January 31, 2011, and anticipates holding a conference call to review those earnings on Tuesday, February 1, 2011.
COMPANY DESCRIPTION
Olin Corporation is a manufacturer concentrated in two business segments: Chlor Alkali Products and Winchester. Chlor Alkali Products manufactures chlorine and caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, potassium hydroxide and bleach products. Winchester products include sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
