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Felman cutting production, workers at New Haven plant

CHARLESTON, W.Va. - Citing a poor sales environment and high electricity costs, New Haven steel additive manufacturer Felman Production is planning to lay off some workers and temporarily shut down one of its furnaces next month.

The company announced the decision late Friday evening as part of a series of strategic cost reduction measures it hopes will combat poor market conditions.

Felman is a leading producer of the additive silicomanganese, a deoxidizer that allows steel companies to produce a purer type of steel. It's made by taking three raw ingredients and heating them at 3,000 degrees Fahrenheit in an electric arc furnace to produce the new material.

It produces about 105,000 tons of the material each year.

The company said silicomanganese prices have been week for several months. Meanwhile, it said its manufacturing costs, namely electricity, have continued to rise.

To combat the costs, the company said it would shut down one of its three furnaces on May 31. It is also reducing the size of its workforce and amount of overtime granted to workers.

"Given the difficult business environment, we closely examined Felman's cost structure and determined the changes were necessary to ensure the enterprise's long-term viability," Mordechai "Motti" Korf, CEO of Felman parent company Georgian American Alloys, Inc., said in a statement.

"Given the difficult business environment, we closely examined Felman's cost structure and determined the changes were necessary to ensure the enterprise's long-term viability," Korf said.

Several management and contract positions have already been eliminated. 

"In order to properly align its administrative and labor resources with current manufacturing costs, Felman Production has unfortunately had to release a small number of staff with salaried positions," the company said in a statement.

The company will also temporarily lay off some hourly employees on June 3, following the furnace shutdown.

The company did not specify how many employees would be laid off.

Felman employed 250 hourly and salary workers when it celebrated the 60th anniversary of the New Haven plant last July.

The Foote Mineral Co. built the plant in 1952, and it has had a tumultuous history over the years. The plant closed and reopened numerous times as some owners declared bankruptcy and sold the plant to new owners.

The plant's most recent closure was in 2006, when Felman bought it for $20 million from bankrupt Highlander Alloys. Felman invested an additional $80 million to restart operations at the plant that year.

The company said it would use the shutdown to perform maintenance on each of its furnaces, shutting one down at a time on a rotating basis in order to conduct repairs.

The shutdown will last at least through September, when the company will re-evaluate market conditions. The company said if economic conditions were still poor, it would continue to leave the furnace offline "until conditions improve."

The company is also exploring other ways to boost efficiency and productivity at the plant. It plans to bring processing of its slag byproduct in-house, as part of that plan.

Contact writer Jared Hunt at business@dailymail.com or 304-348-4836.

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