Sherwin Alumina Co. announced yesterday that it is closing its plant in Gregory, Texas. The closing is part of Sherwin’s Chapter 11 bankruptcy liquidation plan.
According to the company, the plant, which is located about 200 miles southwest of Houston, is a casualty of the bankruptcy court’s releasing of Noranda Bauxite Ltd. from its supply contract with Sherwin. Noranda successfully argued that the contract was onerous and prevented the firm from successfully reorganizing its own business.
“This was an extremely difficult decision to make, and one we arrived at only after exhausting all other options,” said Sherwin’s President and Chief Executive Officer Thomas Russell. “We made—and will continue to make—every effort to sustain Sherwin as a viable business. Unfortunately, at this time, the best available option for our stakeholders is an orderly wind-down of Sherwin’s operations. While we are extremely disappointed with this outcome, we have exhausted all other possibilities with our stakeholders. Sherwin’s enterprise simply cannot continue as a going concern, as a result of the chapter 11 bankruptcy filing by Noranda Aluminum and Noranda’s decision to reject its bauxite supply contract with Sherwin.”
“We are extremely grateful to all of our hard-working, talented employees for over 60 years of dedicated service to Sherwin, and saddened at the way our company’s story has to end,” he went on. “Throughout this period of uncertainty our employees have continued to impress, performing their jobs with professionalism. It is thanks to them that Sherwin was able to establish itself as an economic pillar of the Corpus Christi region for so many years.”
Sherwin closes the plant amid a two-year long labor dispute with its labor union. The firm locked out the 450 union workers after negotiations regarding cuts in pension, overtime pay and health care benefits broke down. Replacement employees have been filling in for the locked-out union workers in the interim.
Sherwin filed for Chapter 11 bankruptcy shortly after the new year. The Glencore plc subsidiary will sell its remaining assets to Corpus Christi Alumina, LLC, which is an affiliate of its senior secured lender Commodity Funding, LLC.