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 Felmans cost structure
and determined the changes were necessary to ensure the
enterprises 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 is currently
trading in a range of 53 to 57 cents per pound but with few
spot transactions, according to AMMs most recent
assessment. Prices have dropped steadily from a range of 73 to
79 cents per pound in March 2012 (
amm.com, 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
GAA recently acquired European
companies Georgian Manganese LLC and Vartsikhe 2005 LLC to
bolster its silicomanganese operations (
amm.com, April 22).