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Felman plans to idle furnace, cut staff

Keywords: Tags  Felman Production, idle furnace, staff cuts, GAA, Georgian American Alloys, silicomanganese prices, silicomanganese, Mordechai Korf Daniel Fitzgerald

NEW YORK — Felman Production LLC will idle one of its three electric-arc furnaces May 31 and has already begun reducing its work force, citing a recent decline in silicomanganese prices as a primary factor for the cost-cutting.

The New Haven, W.Va.-based company will conduct planned maintenance work one furnace at a time until September 2013, when it will leave one furnace idle if economic conditions have not improved.

Felman Production has already eliminated several management and contract positions and anticipates temporary layoffs of union employees starting June 3. The company also has brought its slag processing in-house in a bid to increase efficiency and productivity.

"The decline in silicomanganese prices over the past several months combined with rising manufacturing costs, such as electricity, resulted in the decision to move forward with the changes," said the company, a subsidiary of Georgian American Alloys Inc. (GAA).

"Given the difficult business environment, we closely examined Felman’s cost structure and determined the changes were necessary to ensure the enterprise’s long-term viability," GAA chief executive officer Mordechai Korf said in a statement. "While reducing staff is always a difficult decision, our leaner organizational structure will allow us to better weather the challenges we are currently facing and help to increase efficiency. Our customers can rest assured that GAA maintains its commitment to its U.S. silicomanganese operations."

Silicomanganese is currently trading in a range of 53 to 57 cents per pound but with few spot transactions, according to AMM’s most recent assessment. Prices have dropped steadily from a range of 73 to 79 cents per pound in March 2012 (, March 16, 2012).

Felman Production produces about 105,000 tonnes of silicomanganese annually at its 190-acre facility in New Haven. The company is a wholly owned subsidiary of Miami-based GAA, which also owns Miami-based Felman Trading Inc. and Calvert City, Ky.-based CC Metals & Alloys LLC.

GAA recently acquired European companies Georgian Manganese LLC and Vartsikhe 2005 LLC to bolster its silicomanganese operations (, April 22).

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