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Synalloy faces loss due to labor inefficiencies

Keywords: Tags  stainless steel pipe, Synalloy Corp., quarterley results, quarterly loss, BristolFab unit, labor inefficiencies, Thorsten Schier

NEW YORK — Synalloy Corp. expects to post a fourth-quarter loss as labor efficiencies fell "well below profitable levels" at its fabrication subsidiaries after the company doubled staff to handle a growing backlog.

"Both of our fabrication units have had difficulty adding experienced welders to support our current backlog. As a result, we are now working with our customers to assess how we can better align our production capacity with their delivery schedules," the Spartanburg, S.C.-based company said Dec. 17.

Synalloy’s BristolFab unit experienced a pre-tax loss of $1.4 million during October and November as a result of the lower efficiencies.

The company’s shipments of stainless pipe increased in October and November although the product mix was less favorable, with a higher percentage of shipments of pipe under 6 inches in diameter, which has a lower conversion margin than large-diameter pipe, the company said.

Synalloy’s business includes the production of stainless steel pipe, fiberglass and steel storage tanks, specialty chemicals, and stainless and carbon piping systems fabrication.

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