February 11, 2013
NAPERVILLE, ILL. -- Closure manufacturer Portola Packaging Inc. is expanding production at its facilities in Kingsport, Tenn., and Tolleson, Ariz., and shuttering its Batavaia, Ill., plant.
Portola is spending $12 million to install new high-speed compression and injection molding equipment, upgrade existing production lines, and make infrastructure replacements and upgrades at the Kingsport and Tolleson plants. The expansion is already underway and should be completed by the third quarter of 2013, according to a Feb. 11 news release.
The company plans to hire about 30 employees at those locations when the expansion is complete.
The expansion is in response to growing demand for hot-fill and aseptic beverage closures and Portola's growing market share of the dairy business, the company said.
Increased capacity in Kingsport and Tolleson led Portola to end production at its Batavia plant. That facility will begin slowing down production by the middle of April and will shut down completely by August, affecting 76 employees, according to the release.
The company said it would assist those employees via outplacement services.
The Batavia plant's 15 corporate employees will join Portola's headquarters in Naperville, Ill.
Portola cited "geographic location of expected growth opportunities" and the level of investment needed to upgrade the Batavia plant as factors in their decision.
"Our Batavia facility has been producing closures for Portola for the past 20 years. After extensive analysis and careful thought, we came to the conclusion that closing this facility and upgrading production at our other two plants was the best decision for our customers and company," said Kevin Kwilinski, president and CEO, in the release.
The Kingsport facility, located in northeast Tennessee, is close to major northeast, southeast and southern shipping lanes and is a reasonable distance to the midwest. The Tolleson plant, located in the Phoenix metro area, will serve the southwest, northwest and central United States, according to the release.
Portola said it has made a "substantial expenditure" in high-speed compression and injection molding capacity over the last three years. In that time, the company has grown its beverage closure volume by double-digit percentages annually, partially due to new manufacturing and quality initiatives as well as new product offerings for tamper evident, aseptic and extended shelf-life applications, according to the release.
The company had estimated total sales of $310 million in 2011, according to the most recent Plastics News ranking of North American injection molders.
Last year, Portola shut down its cosmetics packaging arm, Portola Tech, and ended production at facilities in Cumberland, R. I., and Nanhai, China.
When the Batavia plant closes, Portola will operate nine manufacturing plants worldwide – two in the United States, three in Canada, and one each in Mexico, the United Kingdom and Russia.