Crompton & Knowles Unit Forms Joint Venture

12 November 1998

Crompton & Knowles Unit Forms Joint Venture to Produce Synthetic Rubber in Mexico; Ohio Facility to Close

    STAMFORD, Conn.--Nov. 12, 1998--Crompton & Knowles Corporation , announced today its Uniroyal Chemical Company, Inc. subsidiary has formed a joint venture with GIRSA, a subsidiary of DESC, S.A. de C.V. , Mexico City, Mexico, to produce Paracril(R) oil-resistant nitrile rubber products.
    Uniroyal Chemical will contribute its nitrile rubber technology and business, and will continue to provide sales and technical service support through its existing organization. GIRSA will contribute its process and manufacturing technology and will be primarily responsible for the construction of a new 40,000 metric ton plant in Altamira (near Tampico), Mexico, which will be the world's largest and most advanced nitrile rubber plant.
    Uniroyal Chemical's production facility in Painesville, Ohio, will close by mid-1999. The company anticipates a fourth quarter pre-tax write-off of approximately $30 million associated with the shutdown, and will provide job placement counseling for the employees affected by the elimination of the 125 positions at the plant.
    "By joint venturing with GIRSA, we will have a world scale facility which will strengthen our competitive position. Customers will benefit from expanded product lines and the combined technical and marketing capabilities of GIRSA and Uniroyal Chemical," said Joseph B. Eisenberg, Crompton & Knowles vice president and head of the company's Chemicals & Polymers unit.
    "The new facility will advance elastomer production to a new level with proprietary equipment and computer control systems that greatly enhance productivity and quality control," said Enrique Ochoa, vice president of DESC's Chemical Sector and head of GIRSA.
    Jeffrey M. Lines, who has been worldwide business director of Uniroyal Chemical's Paracril operation since 1991, will be president of the joint venture and head of ParaTec Elastomers LLC., the marketing company which will be located in the U.S.
    Since 1996, GIRSA's Negromex subsidiary has been producing Paracril for Uniroyal Chemical under an agreement utilizing Uniroyal's process technology. The production site is located in Altamira on the Gulf of Mexico.
    GIRSA is Mexico's only producer of synthetic rubber, phenol, methyl methacrylate and carbon black. It operates 20 facilities in Mexico with 4,200 employees. GIRSA is owned by DESC, a $2 billion company employing 20,000 people in the businesses of automotive parts, consumer products, food, and real estate as well as chemicals.
    Crompton & Knowles is a global producer and marketer of specialty chemicals and equipment with 1997 sales of $1.85 billion.