That well-known address in Pittsfield, Mass., was the home of GE Plastics, which in 2007 was bought by Saudi Basic Industries Corp. (Sabic) and renamed Sabic Innovative Plastics. On Oct. 8, officials with Riyadh, Saudi Arabia-based Sabic announced that the firm is dissolving Sabic IP — one of the world’s largest polycarbonate makers — and is closing Sabic IP’s Pittsfield headquarters.
Some of the 300 employees in Pittsfield will transfer to Sabic offices in the Houston area, officials said in a news release. The company is still evaluating the fate of Pittsfield’s Polymer Processing Development Center. The PPDC has been a showcase for Sabic materials and cutting-edge plastics processing technology since 1989.
Officials said in a separate news release that Sabic IP’s commodity products will be placed in the parent firm’s Chemicals and Polymers unit. Remaining Sabic IP products will be in a new Specialties unit.
“Along with the Performance Chemicals [strategic business unit]…the Innovative Plastics SBU will cease to exist,” officials said in the release.
No information was available as to which Sabic IP products will be commodities and which will be specialties. In addition to Lexan-brand PC, Sabic makes several specialty resins including Noryl-brand PPE, Ultem-brand polyetherimide, Cycolac-brand ABS and LNP-brand compounds.
Sabic spokesperson Jodi Kennedy said it hasn’t yet been decided how many Pittsfield employees will be asked to transfer to Houston. She added that there’s no timetable to decide what will happen to the PPDC. Kennedy also said that the business reorganization was not connected to the decision to establish Houston as Sabic’s regional headquarters and, as a result, close the Pittsfield office.
The new office structure is expected to be in place by Jan. 1. Sabic IP veteran Greg Adams — the firm’s vice president of industry marketing and strategy — is leading the transition effort.
The business that is now Sabic IP has been based in Pittsfield in some form since 1903, when General Electric Co. bought the Stanley Electric Manufacturing plant there. GE began making phenolic plastic resins there in 1909. GE’s employment numbers in Pittsfield — including aerospace, transformers and related businesses — peaked at 13,000 in the 1940s.
“Exiting the Pittsfield site was a logical yet very difficult business decision, knowing the important role our business and people have played in this community over the years,” Sabic vice president and acting CEO Yousef Al-Benyan said in a news release.
“As Sabic continues to expand in the Americas, we need many of the talented Pittsfield employees to be part of our strong regional team,” he added.
Sabic has three locations in the Houston area. The firm — majority-owned by the Saudi government — is a global leader in polyethylene and polypropylene production. Sabic officials publicly have said the firm is interested in a North American investment or joint venture to take advantage of newfound supplies of natural gas in the region that can be used as a plastic feedstock.
Sabic’s decision to leave Pittsfield “is truly the end of an era,” said Jim Allison, president of AH&M Marketing Communications in Pittsfield. “But corporations need to make difficult decisions to strengthen their competitiveness, which is exactly what Sabic has done.”
Allison worked for GE Plastics in Pittsfield from 1984-88. His firm then did communications work for GE Plastics and Sabic IP for more than 20 years.
“Unfortunately the impact of this move on the local community is going to be severe,” he added.
Petrochemicals market veteran Robert Bauman said a relocation like Pittsfield-to-Houston “usually is done when the business is under-performing and there’s a need to reduce costs.
“The engineering plastics business has become more commoditized,” said Bauman, president of Polymer Consulting International in Spring, Texas. “This occurred when the technology patents expired and more companies entered the business. By combining (Sabic IP) with another division, there will some significant cost savings.”
Sabic no longer separates annual sales for Sabic IP. The business had sales of $6.7 billion in 2006, the year before Sabic spent $11.6 billion to acquire it.
A global recession put the business under immediate pressure. Internet technology also took a huge chunk of markets for PC optical media such as CDs and DVDs.
Officials added in the release that one of the drivers of the change is “the differing technology priorities of commodity and specialty businesses.”