Unfortunately, without a formalized product rationalization
process, underperforming SKUs are recognized too late, and the enterprise is faced with eliminating the excess inventory and taking a loss on the product.
is a factor often viewed as out of the control of management and internal auditors.
The specific actions are being implemented as planned and include plant closures and divestitures, product and plant rationalizations
and reduced selling, general and administrative expenses.
The methanol market has suffered weak pricing conditions over the past two years but has shown recent pricing strength based on rapidly rising natural gas costs, rising industrial demand, current strong MTBE demand, continuing rationalization
of high cost capacity and competitors' production problems stemming from low maintenance spending through cyclical lows.
The strong position, the security driven growth, the potential for further rationalization
and a consolidation of the lock business creates opportunities for a continuous good profit growth.
As part of Summit's rationalization
program in 1997, dispositions of non-core assets totaling $51 million were concluded, including dispositions at Sturgeon Lake, Dunvegan, Manir, Pine Creek and Hays in Alberta, and Viewfield and Cantal in Saskatchewan.
Management expects to reduce leverage to a range between 45%-50% by fiscal 1998, with debt reduction from continued asset rationalization
and improved cash flow from cost improvements.
NYSE:ALO) today announced that its Board of Directors, at a meeting following the Company's Annual meeting, has approved a production rationalization
plan for the International Pharmaceuticals Division and a plan to accelerate the previously approved production rationalization
plan for the U.