As
stated in the last call, we don’t expect this transaction to begin to
positively impact our earnings until the second quarter of fiscal 2010,
and it should continue to do so with more effect during the balance of the
fiscal year. The relocation and integration is an intensive
effort and we are grateful to all of our team in Australia for their work
and commitment in this effort.
As
noted earlier, our Malaysian operations are performing quite
well. The expansion of our compounding capacity for Malaysia
for Bayshore products in that market with the installation of a second
production line is progressing smoothly. It is scheduled to
begin production in April.
The
Asia Pacific region lost $200,000 in the quarter primarily due to the
closing costs of the Melbourne plant. This compares to
operating loss of ($5,000), in the previous quarter, and an operating loss
of $1,300,000 a year ago. Volumes processed in the region
increased 19% from the same quarter last year.
Over
the past four fiscal years our average operating income (excluding
goodwill impairment in 2009) in the Asia Pacific business unit has been
$1.9 million. Clearly, we have great expectations for this
region, under Derek Bristow’s leadership, in the future.
Europe
:
As
noted in all calls, we’ve got a great team in Europe, and are building a
stronger team - - deeper into the management group to support these
efforts. The results speak for our team’s efforts.
While
our numbers in Europe continue to be impacted by the slowing economy, they
also reflect the strength of our position in that market. We
earned $1.7 million in operating income during the quarter, compared to
losing $150,000 in the same quarter last year. Volumes were up
10% from the previous year. We suspect that we are winning
market share as we think the European demand is weaker than our numbers
reflect. And we continue to see opportunity for
improvement.
Over
the last four fiscal years, our average operating income in Europe has
been $8.5 million per year.
Brazil
:
In
the past calls, we have voiced confidence in our team and market position
in Brazil. This quarter, that confidence was
confirmed. Our operating income for the quarter was $420,000,
compared to an operating loss of $60,000 in the same quarter last
year. Volume was up 47% year-over-year.
Our
previously announced expansion of capacity in Brazil, where we are adding
an additional compounding line in our Sao Paulo/Americana plant, is on
schedule. Production should begin in April.
As
we have consistently stated, we see opportunities to expand our business
in this market so that it becomes more meaningful to ICO. We
expect Brazil and all of Central and South America to - - make a
significant contribution to both ICO and Schulman going
forward.
For
the past four fiscal years, operating income in Brazil has averaged
$251,000 per year.
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