DIXON – St. Marys Cement has suspended manufacturing operations at its Dixon plant, which will result in the loss of about two-thirds of its workforce.
Employees received notification of the company’s decision Dec. 5, and the changes will be implemented in January. At the time of the announcement, the plant had about 62 workers. The cement production stoppage is expected to result in 41 layoffs.
The company will offer employees severance packages and outplacement assistance.
Dixon’s plant operations have three facets – manufacturing the cement, grinding it into powder, and distribution.
The company plans to continue the grinding process through next summer until existing inventory is gone. The plant also will be used for distribution purposes.
The decision was made to improve cost efficiencies, and Dixon’s location puts it at a transportation disadvantage, the company said. St. Marys has five cement plants and 12 terminals. Most are along the Great Lakes, as are the bulk of its customers in the United States and Canada.
“The company’s other plants can capitalize on the Great Lakes to distribute bulk cement,” said Chris Mason, a company spokesman. “We look at the total cost of operations, and in addition to the costs of maintaining the plant, it’s cheaper to ship cement than move it by truck.”
The door remains open for resuming full operations in Dixon, but there is no rigid timeline for making that decision, Mason said. Plant maintenance will be done on a regular basis so it could quickly restart manufacturing operations, which include quarry and large kiln work.
“St. Marys continually monitors market conditions, anticipated demand and available resources,” he said. “Based on those assessments, plans are subject to change.”
A determination on resuming production could be made by the end of 2018, he said.
Dixon Mayor Li Arellano Jr. said there had been no communication from the company, but the plant is outside city limits.
The company said it was in the process of making notifications, but that its first priority was the workers.
“We’ve been in talks in the past with them about long-term goals, but macroeconomic factors always have them re-evaluating their plans,” Arellano said.
John Thompson, the county’s former economic development director, had extensive conversations with the company over a long period of time, but little can be done locally to influence the strategic plans of multinational corporations, the mayor said.
“You always hope to see every industry in your community grow, but the reality is that there’s always going to be an ebb and flow. We’re always here to help, though, in any way we can.”
St. Marys Cement is part of Votorantim Cimentos, one of the largest cement producers in the world. Based in Sao Paulo, Brazil, it operates plants in 15 countries. The St. Marys subsidiary is based in Toronto, Canada.
The plant at 1914 White Oak Lane closed in December 2008, costing the city 90 jobs. The company said the recession and collapse of the housing market had forced its hand, but the decision also came on the heels of regulatory issues with the U.S. Environmental Protection Agency.
On Sept. 8, 2008, St. Marys and then co-owner, St. Barbara Cement, reached a settlement regarding violations of the federal Clean Air Act found at the Dixon facility. The company was fined $800,000 and was required to spend nearly $2 million to upgrade its air-pollution controls.
In January 2015, after a 7-year shutdown, plans were put in motion to reopen the plant. The company had settled its environmental issues with the EPA and there was pent-up demand for cement created during the economic downturn.
The Dixon plant began sending out product 3 months later and eventually increased its workforce to 84.
ST MARYS MARKET
St. Marys Cement has five production plants and 12 terminals, strategically located in the Great Lakes region for the company's U.S. and Canadian customers.
There are plants in Illinois, Wisconsin, Michigan, and Ontario. The terminals are in Wisconsin, Illinois, Michigan, Ohio, and New York.
The Dixon plant had been manufacturing, grinding and distributing cement.