Trex to Idle Plant

The company will suspend operations in Olive Branch, Miss.
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Trex

(TWP)

, a maker of decking and railing materials, is responding to the slowdown in the housing market by suspending operations at its Olive Branch, Miss., facility for an indeterminate amount of time.

All manufacturing will be moved to two other plants, in Winchester, Va., where Trex is based, and Fernley, Nev. Trex halted production at its Olive Branch plant Thursday. Around 115 employees will lose their jobs, but they will receive pay and benefits through Nov. 12.

The company has been operating two production lines at the facility, which serves markets in the South and the Midwest. The plant represents about 10% of Trex's total manufacturing capacity. The company expects to incur charges of roughly $2.8 million.

"In making this decision, the company assessed anticipated capacity requirements considering: the difficult market conditions in the homebuilding and remodeling sectors; the recent upgrading of existing production lines in Winchester and Fernley to provide the capability for increased quality and output; and the economics at each of the company's three manufacturing facilities," Trex said in a press release.

The move, Trex said, will allow it to more appropriately match its demand outlook and improve the efficiency of its manufacturing.

Shares of Trex rose 1.2% to $12.34 in extended trading. The stock had fallen 2.9% in the regular session.