Oil-Dri to shift Illinois work to Tippah Cty

Oil-Dri has two facilities in Tippah County (previous coverage).

As of last year, the company had 150 employees in Blue Mountain and Ripley.

A Kentucky TV station reported yesterday that the company is shifting its cat litter production from Illinois to its Mississippi facilities.

Excerpts from the story from WPSD (full text):

MOUNDS, Ill.–Employees were sent home with letters, letting them know their days of making cat litter will soon come to an end.

It happened today at the Oil Dri corporation, in Mounds, Illinois.

They’re moving their cat litter operations from Mounds to Mississippi, because, according to the company, it’s cheaper to do business in Mississippi and the demand for litter is down.

Cat owners likely know the names Cat’s Pride and Jonny Cat.

“Pulaski is one of the most economically depressed counties in the state, generally in the top five,” Executive Director of the Pulaski County Development Association, Clint Green said.

Oil Dri’s decision will likely make matters worse. Green told Local 6 he thought Oil Dri was happy in Mounds, and there to stay.

“It is a surprise, a very big surprise,” Green said.

Oil Dri employees 63 people at the Mounds plant. Nearly 40 employees could face layoffs, that number may not sound like much. But Green said the plant makes up about 5 percent of the Pulaski County workforce and was the largest employer in Mounds.

The company said some of the Mounds employees will be considered for a limited number of positions in Mississippi. However other details are not clear right now.A company spokesperson tells us while the Mounds Plant will cease cat litter production, they’ll continue manufacturing other absorbent products.

Officials at the Mississippi facilities today directed us to the corporate office for comments. We’ve left two messages today for corporate but haven’t heard back yet.

Info from the company’s filing with the SEC:

Item 2.05

Costs Associated With Exit or Disposal Activities

On May 30, 2012, Oil-Dri Corporation of America (the “Company”) announced to its employees the planned relocation of production of its industrial floor absorbent and cat litter products from its facility located in Mounds, Illinois (“Mounds”), to its plants located in Mississippi. The Mounds location will continue to be a source of the Company’s animal health and nutrition products. This decision was made due to the continued declines in the coarse cat litter market and after a comprehensive evaluation of the Company’s manufacturing operations and cost structure, including state regulatory requirements.

These changes will impact up to 40 employees based in Mounds, some of whom will be considered for a limited number of positions that will be created at the Mississippi locations. Thus, the final number of terminated employees at Mounds will depend on employee relocations.

The Company expects to incur a pre-tax charge of approximately $1,700,000 related to these actions. This charge includes approximately $1,200,000 for asset write-offs, as well as cash expenditures of approximately $450,000 associated with severance and other employee-related costs and $50,000 for production transfer expenses. These costs are expected to be incurred over two quarters, with a majority taking place in the fourth quarter of fiscal 2012 and a lesser amount occurring in the first quarter of fiscal 2013.