09/11/08 — Hilex Poly closes

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Hilex Poly closes

By Matthew Whittle
Published in News on September 11, 2008 1:34 PM

Company officials confirmed this morning that the Hilex Poly manufacturing facility officially closed its doors Wednesday evening.

Hilex Poly Co

The Hilex Poly manufacturing plant on Old Mount Olive Highway in Mount Olive closed its doors Wednesday night as the company made the decision to shut down the facility, which opened in 1987 and employed about 170 people.

The plant, which as of December 2007 employed about 170 people, has been in Mount Olive since 1987, where it most currently has been manufacturing plastic bags and agricultural mulch film.

The news came as a surprise to town officials.

"I just heard it this morning," Mount Olive Town Manager Charles Brown said. "All I know is that they closed the doors as of yesterday.

"We knew there'd been some issues, so I think we probably knew the prospect existed, but it's always a shock when something like this happens. They've been a good corporate citizen of the town of Mount Olive for a long time. It's a big loss to the town of Mount Olive and a big loss to the 150-some employees. Certainly our feelings go out to the employees."

Hilex Poly, formerly Sonoco and a subsidiary of the HPC group of companies in Los Angeles, is headquartered in Hartsville, S.C. Until today, it operated 10 manufacturing facilities across the the United States.

According to the company's Web site, by 2005 with the acquisition of Vanguard Plastics, it was the largest retail carryout packaging manufacturer in the world.

In May, however, the company announced that it had reached a plan with its lenders to restructure its debt to strengthen its financial standing. As part of that process, Hilex Poly filed a voluntary, pre-packaged Chapter 11 bankruptcy reorganization. The plan at the time, according to a release on the company's Web site, was to "continue business as usual," as the day-to-day operations and employees were not expected to be impacted.

In a press release this morning, however, the closure of the Mount Olive plant was described as "part of an ongoing asset optimization plan that the company has been implementing since its acquisition of Vanguard Plastics in October of 2005."

The release did not detail why the Mount Olive plant was chosen for closure, although in it, Ben Mascarello, vice president of operations, said that "while this is an extremely difficult decision, this action supports our overall strategic plan to remain competitive and adjust our capabilities to meet the evolving needs of our customers."

The goal for the move, he continued, is for the Mount Olive plant's manufacturing capacity to be absorbed elsewhere, and "to reduce market capacity for the production of plastic T-shirt bags," as the company has seen a "significant shift in demand toward our reusable bag products."

Mascarello also said in the release that "at Hilex, our employees are our most important asset," that the company is "making every effort to provide employment opportunities within other Hilex locations for a substantial number of our Mount Olive employees," and that officials are "working with other local manufacturers and the Employment Security Commission of North Carolina in order to assist our employees in finding new employment locally."

And already this morning, Mike Haney, existing industry specialist for the Wayne County Development Alliance, said he had been on the phone with Hilex Poly officials working to set up job fairs and other measures to help the company's former employees.

"They've got some very solid employees with some good employable skills," he said. "It's a tough economy right now, but we do have industries that are hiring, and we're hopeful that most of these employees can be placed with other Wayne County employers."

Among the more highly sought-after positions will be machine operators, machinists and mechanics, he added.

He also said county officials are already working to alert other interested industries about the soon-to-be vacated site.

"We have been contacted by other industries, not for this specific facility, but we'd like to be able to market this facility to them," Haney said, noting its accessibility by road and rail, as well as the Mount Olive airport across the street. "The facility is excellent and we want to show it and fill it up as soon as possible. It's going to be a jewel for somebody."

However, he, too, said the announcement came as a surprise when it started appearing on the horizon Wednesday. Especially, he added, when the company had seemed to come out of Chapter 11 at the end of June without problem and had added two manufacturing lines to the plant only two years ago.

"That's one of the things that makes it so disappointing," he said.

Hilex Poly officials noted that decision places about 160 employees on administrative leave for 60 days, while another 20 to 25 will help shut the plant down, though manufacturing operations have ceased. The remaining work will involve shipping the plant's remaining product, a process that is expected to take eight to 12 weeks.