Wellman International's manufacturing facility in Mullagh, Co Meath has been placed under review by its New Jersey-based parent company.
It is understood that Wellman Incorporated, which is quoted on the stock market in New York, is considering selling the plant, which has 275 staff and recycles materials to make polyester fibres for the textiles industry.
This is part of a global restructuring conducted by Wellman, with the Irish plant no longer considered as core to its operations. Sources said the company could be valued at up to €35 million.
On February 21st, Tom Duff, chairman and chief executive of Wellman Incorporated, said it was "exploring strategic alternatives for our European fibres business", which is based at Mullagh.
Downer, a Boston investment bank, has been engaged to help the company evaluate its options, Mr Duff added. The company declined to comment further on the future of the Irish plant.
The parent company reported a net loss of $98 million (€74 million) for the full year 2006. This compared with a net loss of $72 million in the previous 12-month period. Wellman also announced plans to sell its European PET resins business in the Netherlands, while its Engineering Resins division in the US is also being reviewed.
The factory, which sits on a 27-acre site, is one of the biggest employers in the area. Its products include sanitary towels, nappies and pillow cases. Wellman established the factory in 1973. Since then, the company has received €4.9 million in grant aid from the State, none of which would now have to be repaid.
Wellman was in the news in October last year when it emerged it had written to energy regulator Tom Reeves, warning that rising energy costs here would threaten its business. Its managing director, Dick Buddon, stated: "I do not exaggerate when I say that the increases in electricity costs currently foreseen for 2007 could be sufficient of themselves to force this company into liquidation."
In the year to end of 2005, the Mullagh-based operation increased its after-tax profits to €2.2 million from €1.7 million in the previous year. This was largely due to the effect of a €1.6 million "restructuring charge", depressing profits in 2004.
Its operating profit, before restructuring charges, declined from 3.1 per cent of sales in 2004 to 2.6 per cent in the following year. Turnover rose by 2.7 per cent in 2005 to €96.2 million.
It is understood that the company has since experienced difficult trading, with the cost of raw materials increasing sharply.
Staff are represented by four trade unions - Siptu, Amicus, the AEEU and TEEU. A spokesman for the unions said they were informed before Christmas that the plant was under review.
The company recently refused to pay staff increases under the national wage agreement, Towards 2016. Unions have referred the matter to the Labour Relations Commission.
