DuPont Photomasks to close Kokomo, IN, facility

January 19, 2005 – DuPont Photomasks Inc. has said that as part of a consolidation plan designed to reduce costs and improve capital productivity, operations in its trailing-edge photomask production facility in Kokomo, Indiana, will begin to ramp down immediately. The equipment within the Kokomo site will be disposed of or relocated to other DuPont Photomasks sites, and the facility is expected to close during the 4QFY05, ending June 30.

The Kokomo facility, built in 1983, is DuPont Photomasks’ oldest production site. The affected employees there will be offered competitive severance packages, including outplacement support, and some relocation opportunities in other Company locations will be made available. Once the consolidation is completed, the Company’s global workforce will be reduced by 6 percent, or approximately 100 positions.

Marshall Turner, chairman and CEO of DuPont Photomasks, said, “The total available market for trailing-edge products has declined over time, as our customers have accelerated the shift to 130nm-and-below design rules. This has resulted in increasing overcapacity of trailing-edge production equipment across the industry. Despite the accomplishments of our US sales and operations teams to grow market share and improve competitiveness in the region, this trend cannot be completely offset, requiring us to take this action.”

Turner added, “Any reduction in force is one of the most difficult decisions a management team must make. This decision was made all the more difficult because of the experience, commitment, skills and strong work ethic of our employees in Kokomo. Although this is a very difficult decision that has been considered carefully during the past year, we find it necessary to reduce costs, improve capital productivity and achieve a sustained, suitable level of operating profit performance.”

The Company expects the consolidation to be smooth and without impact to customer deliveries.

To account for the cost of the consolidation plan, DuPont Photomasks will record pre-tax charges in the third and fourth quarters of fiscal 2005 totaling between $11.0 million and $13.0 million. The charges will consist of employee severance, facility closure costs and asset disposition charges. Approximately $6.5 million of the charges will consist of non-cash items.

Once the consolidation is completed, DuPont Photomasks will operate a network of eight photomask production facilities. In Asia, the company has facilities in Hsinchu, Taiwan; Singapore; Shanghai, China; and Ichon, Korea. In Europe, facilities are in Corbeil, France; and Dresden, Germany. In the US, facilities will be in Round Rock, TX, and Santa Clara, CA.


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