Tuesday, August 17, 2004
Insulation manufacturer buys bankrupt Buchanan RBX plant
Judge William Stone approved the sale to an Ontario-based company.
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duncan.adams@roanoke.com 981-3324
If during a recent regional flight you could hear yourself think at 20,000 feet, your introspection might have been aided by thermo-acoustic insulation manufactured by the soon-to-be owner of bankrupt RBX Corp.'s plant in Buchanan.
In U.S. Bankruptcy Court in Roanoke on Monday, Judge William Stone approved the sale of RBX's Groendyk plant to MTI Groendyk, a subsidiary of Magnifoam Technology International. The sale price was $3.84 million.
Magnifoam was the sole bidder for the Groendyk operation, which manufactures a variety of industrial silicone products.
Officials said the sale is good news for workers. The Groendyk plant has about 70 employees, with about 60 hourly workers. It is the last operating plant of Roanoke County-based RBX Corp. and subsidiary RBX Industries.
Gregg Strangways, a Richmond-based vice president for Magnifoam, said the company hopes to close the sale by Aug. 27. He said hourly employees of RBX will become employees of MTI Groendyk and that the new owner will continue a collective bargaining agreement previously negotiated with a union local of the United Steelworkers of America.
"We'd immediately recognize the Steelworkers and bring on all active hourly employees," Strangways said.
Eddie Robtison, staff representative for Virginia for the United Steelworkers of America, attended Monday's auction and saluted Strangways and his company afterward for their willingness to recognize the union. Strangways even attended earlier this month a meeting of the union local, Robtison said, and listened to suggestions from members about how to improve plant operations.
In turn, Strangways said the cooperation of Robtison and David Jury, assistant general counsel for the United Steelworkers of America, was a key to the deal.
An earlier purchase agreement had set the sale price at $3.9 million. But RBX Corp. agreed to cut $60,000, testified Tim Bernlohr, RBX president and chief executive officer, after a study by MTI Groendyk "discovered several environmental concerns" at the Buchanan site. Strangways would not disclose specifics. But Robert Westermann, an attorney for RBX, said he understood MTI Groendyk had worries about asbestos, environmental permitting, and some "drums of stuff" RBX already had agreed to remove.
RBX Corp. was once a leading manufacturer of closed-cell rubber and plastic foam materials. But the company is in its second Chapter 11 bankruptcy and is liquidating assets instead of trying to reorganize. RBX Corp. has sold plants or portions of plants in Conover, N.C.; South Holland, Ill.; Colt, Ark.; Tallapoosa, Ga.; and Bedford. When the Groendyk sale is included, those sales total about $35 million. The bankruptcy court and a plan administrator eventually will decide how that money is disbursed.
Strangways said Monday that Groendyk's silicone products and processes will complement Magnifoam's product lines.
"Groendyk has always had a great reputation and a great customer base," Strangways said.
Magnifoam's customer base has included Bombardier, a manufacturer of aircraft and rail transportation equipment.
In addition to its manufacturing plant and headquarters in Mississauga, Ontario, Magnifoam has manufacturing operations in Richmond and in Bremen, Germany. The company also has sales operations in England and Sweden and an engineering support center in Brazil.
Strangways said Magnifoam officials believe there is potential for growth at the Groendyk plant, which he said has been affected by RBX's financial woes.
"It's really suffered from a lack of capital," he said.
