DuraFiber selling, closing tire cord assets

HUNTERSVILLE, N.C. — Tire cord supplier DuraFiber Technologies has put its three U.S. plants on closure notice and agreed to sell polyester yarn plants in France and Mexico, effectively putting the firm, previously called Performance Fibers, out of the tire cord business.

DuraFiber CEO Frank Papa cited increased labor, energy, transportation and raw materials costs, together with continued market pressures, as reasons for the closure notices in North and South Carolina, saying they have "strained DuraFiber's finances to a point that is no longer sustainable."

Separately, DuraFiber — known as Performance Fibers until 2014 — notified workers July 13 at plants in Salisbury and Shelby, N.C., and Winnsboro, S.C., that those facilities will be idled if a buyer is not identified by Sept. 11. Those plants employ approximately 800 workers.

The company said its decision to close the plants follows a "series of initiatives to lower production costs in response to increased competition in the textile industry, as well as a thorough review of strategic alternatives, including potential asset sales."

Mr. Papa said DuraFiber was continuing to "pursue strategic alternatives to keep these plants open," while at the same time seeking to ensure a smooth transition for employees, customers and suppliers.

Huntersville-based DuraFiber — which traces its roots to AlliedSignal, Honeywell and Hoechst Celanese — is selling polyester yarn factories in Queretaro, Mexico, and Longlaville, France, to Thai chemical group Indorama Ventures Ltd., which said the deal aligns strongly with its "strategy of pursuing accretive growth opportunities in the high value-added automotive segment."

Following the U.S. plant closings and the sale of the French and Mexican plants, DuraFiber will continue to operate one plant in Europe, in Bad Hersfeld, Germany, which makes high- and low-denier industrial products for customers in the sewing thread, industrial, and automotive industries.

Indorama said its purchase of DuraFiber Technologies México Operations S. A.de C. V. in Queretaro is a "complementary fit" with its existing tire cord fabric business in Europe and a strong fit with its existing polyester site in Mexico.

Financial details of the transactions, which are expected to be completed in the third quarter pendng relevant regulatory approvals and employee approval, were not disclosed.

Sun Capital Partners Inc., which has owned a share of DuraFiber and its predecessor companies since 2004, has not yet commented on the situation.

Aloke Lohia, group CEO of Indorama Ventures (IVL), said DuraFiber is "the sole domestic tire cord fabric producer in Mexico with products approved by major global tire companies."

Mr. Lohia went on to say that the automotive segment was a "key growth driver" in Indorama's HVA portfolio, contributing to half of the company's earnings.

This is Indorama's second acquisition of DuraFiber assets. In 2014 it acquired the company's Asian business unit — comprising principally one polyester yarn production unit in China — from the company, which was known at that time as Performance Fibers.

It's also Indorama's second high-profile acquisition this year in the tire reinforcements arena. In April the Indonesian company acquired Glanzstoff Group, a European producer of tire cord fabrics and single-end cords for high-performance tire applications.

Glanzstoff offers choices in high-performance rayon, aramid, nylon 6.6 and polyester, along with hybrid filament yarns for the high growth and high-performance automotive applications. It has manufacturing sites in Luxembourg, Italy and Czech Republic, and is constructing a plant in China.

In Mexico each year, the acquired company has capacity to produce 37,500 metric tons of high-modulus/low-shrinkage PET, heavy denier industrial PET and Nylon. All of these are fully integrated into tire cord fabrics and industrial textiles. The plant in Longlaville, France, is rated at 35,000 tons a year.