Carpenter Technology Corporation, headquartered in Philadelphia, Pennsylvania, USA, has stated it plans to idle two of its US-based metal powder production facilities, as the company reacts to the COVID-19 pandemic and an oversupply of titanium powder in the market.
However, as stated by Tim Lain, Carpenter’s Vice President & Chief Financial Officer, during the company’s third quarter 2020 results conference call, Carpenter has no plans to exit the metal powder market. “We remain committed to a metal powder production, but consider it necessary to close these two facilities to save cost and preserve cash flow in the near term,” he commented.
The sites affected, reported to be Rhode Island and West Virginia, are set to close in the next quarter.
During a Q&A session in the conference call, Tony Thene, CEO, added, “Unfortunately when we brought online our West Virginia facility there were many others that brought on titanium powder capacity, so that is in an oversupply position right now.”
“We can still offer a full portfolio to customers,” he stated.
The company also announced plans to exit the downstream oil and gas (Amega West) business. “We expect that the actions to exit the Amega West business and idle the two powder facilities will generate estimated annual savings of $15 million to $20 million based on the current run rates for these businesses,” added Lain.