OLEAN - Henkel Corp. officials announced Thursday it will begin a three-year process to shut down its Olean plant.

The announcement was long anticipated. As early as 2006, the plant had 230 workers, due to layoffs, that number has shrunk to 105 today.

In May of 2007, the company announced it would begin cutting back more jobs as it transfers its epoxy molding compounds division from Olean to a joint venture in China. Henkel produces coatings, powders and encapsulants for the worldwide electronic and industrial markets.

Company officials gathered employees at Henkel's Olean plant on Franklin Street Thursday at 7 a.m. to inform them of the plant closing. There isn't a firm date for shuttering the Olean plant other than it will close sometime in 2011.

Cindy Demers, vice president of corporate communications for Henkel North America, said Henkel's Olean employees will receive severance packages and support finding new jobs.

"We're going to be having follow-up meetings and addressing employee questions throughout this process," she said.

Henkel has 8,000 employees in the United States and 50,000 worldwide. Ms. Demers said she doesn't know if any of the Olean employees will be offered jobs at the new plant. She said Henkel does encourage its employees to explore job postings within the company.

Ms. Demers said as different production units finish filling orders they're working on, those lines will be retired at the Olean plant.

"It's going to be phased in over time," she said of the plant closing.

Ms. Demers said the decision to close the Olean plant was made to increase efficiency since most of the materials produced at the plant are used by manufacturers in Southeast Asia and China.

Henkel announced in 2005 that it would shift some production from Olean to Henkel Huawei Electronics Co., Ltd., in Lianyungang, China, which is a joint venture of Henkel Corp. and China's Huawei Electronics.

Ms. Demers said the decision to close the plant had nothing to do with the quality of work done in Olean.

"Certainly this is not a reflection on the production and the capabilities of the people working at the plant in Olean," she said.

Mayor David Carucci encouraged Henkel employees to contact the Greater Olean Area Chamber of Commerce at 372-4433 for information on jobs available in the region.

"Our heartfelt wishes go out to those who over the next three years will lose their jobs. We'll do whatever we can to help them find new jobs," he said. "We get contacted at the city and the chamber gets contacted all the time with information about job openings."

Mayor Carucci said he's glad Henkel is giving employees and the community three years to prepare for the plant closing. The Henkel plant is a modern manufacturing facility located in the city's Empire Zone. Companies that move into the zone receive tax breaks and reduced utility costs to bring jobs to the area.

The mayor said the city and Greater Olean will have time to search for a new company to move into the facility.

The plant in Olean was founded as the Dexter Electronic Materials Division in 1948, which made encapsulants and coatings under the HYSOL brand name. The company was known locally as Dexter HYSOL. In 2001 Dexter Corp. sold the Olean plant to Loctite Corp., a division of Henkel Corp. of Dusseldorf, Germany, for ,400 million.

(Contact reporter John Eberth at jeberth@oleantimesherald.com)

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