STERIS is closing chemistry plants in St. Louis and Plymouth and moving the work to one site in North Carolina, at a cost of up to $70m
Two plants are to close, and a third is being built to replace them.
STERIS told the Securities and Exchange Commission on Wednesday that it has adopted what it calls a targeted consolidation plan, moving manufacturing and distribution of its formulated chemistries into a new Center of Excellence in North Carolina. The plan anticipates closing the chemistry manufacturing and distribution facilities in St. Louis, Missouri, and in Plymouth, Minnesota. The disclosure came under Item 2.05, the item a company uses when it commits to an exit or disposal activity and has to say what it will cost.
The cost is $55m to $70m before tax.
How the charge breaks down
Roughly $40m to $50m of it is cash. The company says that money will consist primarily of retention, severance and benefits for the people it calls Associates, along with transition, facility exit and other related costs.
The remaining $15m to $20m is non-cash, and the company attributes it primarily to accelerated depreciation. That is the accounting consequence of deciding that a building and its equipment will stop being used earlier than the books assumed.
The timetable is long
Completion is anticipated during fiscal 2030.
That is the detail that changes how the filing reads. This is not a plant closing this quarter. It is a programme of spending and closure spread over about four years, disclosed at the point of commitment because the rules require disclosure at the point of commitment, not at the point of action. No closure date is given for either site.
What the document does not say
It does not say how many people work at St. Louis or at Plymouth, or how many jobs the plan affects. It does not say where in North Carolina the new site will be, what it will cost to build, or when it will open. It does not say whether anyone will be offered a move.
The company's own account of why it is doing this is that the investment is expected to accelerate innovation, expand capacity and optimise its United States chemistries manufacturing and distribution network. That sentence is the company's, and it is the only reason on the record.
One line at the end deserves attention from anyone who reads the results. The charges will be excluded from adjusted earnings measurements. The money is real and it will be spent, and it will sit outside the figure the company guides to.
