HARTLAND, Maine — Prime Tanning Co. Inc. announced Friday that its leather-finishing operations in Berwick will cease immediately, affecting 150 workers, but jobs at Prime’s Hartland facility, formerly Irving Tannery, are secure.
The finishing operations will move from Berwick to Hartland, and company officials said they hoped some of the Berwick employees would choose to move to the Hartland plant.
“Prime will work with state and local agencies to organize the facility closure, as well as provide ongoing job transition support for the employees involved,” the company’s Paul LaRochelle said Friday afternoon. “While 150 individuals will be affected by closure of the Berwick finishing operations, employment levels at the Hartland facility will rise as a result of the increased production there.”
Gov. John Baldacci expressed concern about the closure of the Berwick plant.
“It is difficult to see a facility shut down and hard-working Mainers facing economic uncertainty,” he said. “We will continue to work with the company to ensure the valued employees, their families and impacted communities receive assistance.”
The Maine Department of Labor will deploy the Rapid Response team to Berwick shortly, the governor’s office said.
Prime operates the largest vertically integrated wet blue and side-leather finishing tanneries in North America, with annual capacities of 140 million feet.
The company produces side-leather for the largest and best-known leather brands in the world, with products that serve high quality footwear, handbag, upholstery and specialty markets worldwide, as well as the U.S. military.
“For the past 10 months we have worked hard to keep the existing facilities open while acquiring additional plants,” LaRochelle said. “But with energy crunches, the price of oil and chemicals, it has been a very tough environment.”
LaRochelle said that the transfer of leathers between the two facilities is already under way, and Prime believes it will have the balance of the leathers moved by October.
In November 2007, Prime Tanning merged with Cudahy Tanning in Milwaukee and Irving Tanning in Hartland, and since then has been engaged in an intensive domestic reorganization to improve efficiencies and profitability. As part of the reorganization, the Cudahy facility was closed in May 2008, and its leather inventory was transferred to Prime’s Hartland finishing facility.
“Prime will continue to use its Berwick offices as its temporary headquarters while it seeks a sale of the facility,” LaRochelle said.
In a prepared statement, Prime’s CEO, Robert Moore, commented: “This was a very difficult but necessary decision for Prime as we work to streamline our domestic operations and improve profitability. Like many manufacturing businesses in the U.S., we have been adversely and negatively affected by unprecedented increases in the cost of energy and chemicals and the general economic slowdown. These unforeseen developments have hastened our need to eliminate excess costs and overhead, and our success as a company depends upon our ability to act decisively to achieve that result.”
On March 31, Prime announced its intention to merge with Shanghai Richina Leather Co. Ltd. to form Prime Leather International, which will form one of the leading suppliers of leather worldwide. The deal is expected to close in the fourth quarter of this year.