Formica, which employs 500 people at its factory in North Shields, has been put up for sale.
Its owner, Fletcher Building, has announced that it plans to focus on core markets in New Zealand and Australia.
The decision comes less than a year since it pledged to plough £40million into the Coast Road site over three years. But Formica directors have allayed any concerns for the future of the plant and says that investment plans will continue.
Peter Rush, president of Formica Group, said: “While we will miss being part of the Fletcher family, the investment that we announced last year will continue to be delivered in full, culminating with the commissioning of the new plant equipment later this year. With this, the future looks bright for our business and we are enthusiastic about what lies ahead.”
He added: “Under Fletcher Building’s ownership, Formica Europe has received record levels of investment to drive improvements in safety, service and manufacturing excellence and to create an innovation pipeline that will allow us to continue the turnaround through sales growth.”
Fletcher Building has owned Formica Group Europe since 2007 and has since made numerous changes to the operation of the laminate manufacturer. Now, it is planning to divest its international holdings which include Formica Group and The Roof Tile Group (RTG).
Fletcher Building is one of the most diversified building products companies in the world.
While most of the businesses with Fletcher Building hold number one or two positions in their markets, the parent company has decided to increase focus on a narrower set of businesses.
To achieve this, it has made portfolio choices that will simplify the business and allow it to invest behind specific market opportunities. Fletcher Building has made the strategic decision to focus on core markets in New Zealand and Australia.
Formica Group remains commited to its mission of creating industry-leading design aesthetics and providing outsanding customer service to all of its markets.
As part of this week’s announcement, Fletcher stated a preference to sell Formica Group and RTG as whole entities. The divestment process is expected to take 12-18 months, during which time businesses will continue to operate as usual.