Wellman plant shutdowns result of bankruptcy filing

Employees at the Darlington and Johnsonville locations of Wellman Inc. will continue to work for the next 60 days while the plants are prepared to be shut down, a corporate spokesman told the Morning News on Wednesday morning.

Wellman manufactures and markets high-quality polyester products, including PermaClear brand PET (polyethylene terephthalate) packaging resins and Fortrel brand polyester fibers.

The announcement about the shutdown comes after the company filed for Chapter 11 of the U.S. Bankruptcy Code for the Southern District of New York on Feb. 22, which was cited as the reason for the closings by the company spokesman Steve Ates.

Filing under Chapter 11 of the U.S. Bankruptcy Code frees a company from the threat of creditors’ lawsuits while it reorganizes its finances. The debtor’s reorganization plan must be accepted by a majority of its creditors. Unless the court rules otherwise, the debtor remains in control of the business and its assets.

“We will be closing both of those facilities over the next 60 days,” Ates said. “They are both manufacturing facilities, so it will take some time to scale production and sell off inventory.”

In the meantime, Antes said, the company’s more than 700 employees will continue to work with full benefits.

“They’ve been given a warning action notice,” he said.

The company had said in a previous interview with the Morning News that the bankruptcy proceedings likely wouldn’t have affect the 550 people who work at the Palmetto plant, located off McIver Road in Darlington, nor the 170 people employed at the Johnsonville plant.

But, Ates said, the company couldn’t factor in the current credit and financial problems plaguing Wall Street.

“Originally, our first plan was where the Palmetto plant in Darlington would continue to run,” he said. “That plan was not successful. With the current credit environment, the only plan that would work is one where both plants were closed.”

A task force of the Darlington County Economic Development Partnership, S.C. Department of Commerce-Rapid Response and S.C. Employment Security Commission will be meeting with Wellman officials Friday to discuss their closure plans as they move their bankruptcy reorganization and to see if there are opportunities to put the Palmetto Plant to use in some other capacity in the future, according to a press release issued Wednesday afternoon by the partnership.

In addition, the Darlington County Economic Development Partnership will be working with the Florence County Economic Development Partnership, North Eastern Strategic Alliance, Florence-Darlington Technical College and the Southeastern Institute of Manufacturing and Technology to continue to develop new business and industry in the region to utilize the skills of these Wellman employees, according to the partnership release.

“First and foremost, our thoughts and concerns go out to the Wellman employees. This is a difficult situation for them and their families,” Robert Long, executive director of the Darlington County Economic Development Partnership, said in the release. “We want to work with Wellman and state agencies to minimize the impact where possible.”

This latest development is the end of a recent string of layoffs and reorganizations for the company.

Wellman Inc. announced in September 2006 it would end its fiber operations in Johnsonville, putting 360 people out of work. The move came as the company restructured its U.S. fiber operations to improve its operating results, according to a press release issued by the company.

The company consolidated all its U.S. fiber production in its Palmetto plant in Darlington, and closed the fiber production capacity at its Johnsonville plant.

The Johnsonville plant was built in 1954. The son of the original owner, Jack Wellman, lived in the area and was active in community affairs for many years.

The Palmetto Plant has been a part of the Darlington community since 1973.

In June 2007, Wellman Inc. sold the manufacturing line of Wellstrand fiber and the rights to the trademark to David C. Poole Co. of Greenville. David C. Poole Co. Inc. is a distributor and manufacturer of synthetic fibers for textile and industrial end uses and a distributor of PET resin for packaging applications.

David C. Poole Co. Inc. purchased the core equipment for its new facility from Wellman Inc., and uses 390,000 square feet of distribution and manufacturing facilities in Johnsonville.

The South Carolina Employment Security Commission