Kemet Lays Off Employees at Simpsonville HQ

Amid a weak market, Kemet Corp. on Tuesday laid off 68 employees at its Simpsonville headquarters, and let go an additional 134 workers at plants around the world, the company said.

The company, a manufacturer of tantalum, ceramic, aluminum, film, paper and electrolytic capacitors, expects to achieve cost savings of approximately $3.8 million per quarter beginning in the September 30, 2013 quarter, and $12.3 million in its fiscal year ending March 31, 2014, the company said.

Kemet CEO Per Loof said: "We remain steadfast in our quest to lower our cost structure in view of the lethargic economy that has affected the volumes in our industry and the company over the past couple of quarters. We expect to see significant leverage on these actions when the business climate returns to normal levels combined with the vertical integration of our tantalum supply chain and the expected improvement in our film & electrolytic business from our continuing restructuring efforts."

Loof also said the terminations are "an early synergy benefit from our investment in NEC TOKIN, allowing us to significantly lower our breakeven threshold to within current revenue projections." 

Last year, Kemet bought a large stake in NEC TOKIN from NEC Corp. of Japan for around $100 million. NEC TOKIN is a manufacturer of tantalum capacitors, electro-magnetic, electro-mechanical, access devices and piezoelectric ceramics.

In addition to the job cuts here and globally, the company also announced a shakeup in senior management in Simpsonville. 

The company accepted the resignations of Conrado Hinojosa, Executive Vice President –Tantalum Business Group and Marc Kotelon, Executive Vice President – Global Sales. Charles C. Meeks, Jr. will take over as head of the Tantalum Business Group, and John J. Drabik will assume the leadership of Global Sales. While the changes are effective immediately, Hinojosa and Kotelon will assist in an orderly transition through the end of June, Loof said.

"I expect the change in the new management line-up will accelerate our drive toward our timeless model financial expectations," Loof said. "It is imperative we improve our financial performance even if the world economic conditions in our industry remain sluggish."

Kemet's net sales for the fiscal year ended March 31, 2013 were $843 million —  a 14.4 percent decrease over the same period last fiscal year.

"The team remains focused on delivering improved financial results even as the industry remains trapped by an economy that is moving sideways," Loof said. "We expect to see benefits during our next fiscal year from our relationship with NEC TOKIN…."