Ashland Advances Strategic $60M Manufacturing Network Optimization

Ashland Inc. ASH has provided an update on its $60 million plan to optimize its manufacturing network, a key part of its execute strategy. To improve operational efficiency, profitability and the competitiveness of its core technologies, the company will close its Parlin, NJ facility and move hydroxyethyl cellulose (HEC) production to its Hopewell, VA plant. 

This transition supports Ashland’s goal of scaling operations, lowering production costs and achieving HEC optimization targets on schedule. Additionally, the company will shut down its Chatham, NJ site and transfer microbial protection production to its Freetown, MA facility, furthering its efforts to consolidate smaller operations into larger, more efficient sites. Beyond these network changes, Ashland remains focused on long-term investments in growth.

With its portfolio optimization and $30 million restructuring plan now complete, the company is accelerating cost savings through its $60 million manufacturing network optimization effort. This step is aimed at driving growth, creating opportunities to modernize and repurpose existing assets and improving operational efficiency. These initiatives are expected to enhance the company’s profitability, lower cost position and support market share expansion.

Ashland’s $60 million manufacturing network optimization continues to reinforce its core technologies, including vinyl pyrrolidone and derivatives (VP&D) and HEC. The company has made additional investments in its Hopewell facility to expand both capacity and capabilities. 

This update marks the completion of the HEC optimization efforts, a key part of the broader cost-saving strategy. The newly streamlined HEC production network is now well-positioned to meet global demand, with facilities operating in the United States, Europe and China. Looking ahead, a key focus for Ashland is enhancing productivity across its plant network to exceed the $60 million savings target set by the optimization plan.

Shares of Ashland have lost 41.4% in the past year compared with a 3.7% rise of the industry.

ASH’s Zacks Rank & Key Picks

ASH currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Agnico Eagle Mines AEM and Avino Silver & Gold Mines Ltd. ASM.

Carpenter Technology currently carries a Zacks Rank #2 (Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 11.1%. The company's shares have soared 157.7% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Agnico Eagle’s current-year earnings is pegged at $1.61 per share. AEM, carrying a Zacks Rank #1 (Strong Buy), surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings surprise of 12.3%. The company's shares have rallied 74.4% in the past year.

Avino Silver, which currently carries a Zacks Rank #1, beat the consensus estimate in each of the trailing four quarters. In this time frame, it delivered an earnings surprise of roughly 104.1%, on average. ASM's shares have rallied 271.5% in the past year.

 

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This article originally published on Zacks Investment Research (zacks.com).

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