NEW YORK - Crown Cork & Seal Co. Inc. will close a plastic container plant in North America and reorganize two more to improve cost effectiveness. The firm would not identify the plants that will be affected.
The Philadelphia-based packaging company also is continuing the restructuring of its beverage can business worldwide, which could entail closing one or more plants, said William J. Avery, chairman, president and chief executive officer.
``We noted weaknesses on the plastic side too, especially in thearea of isotonic drinks and juices in PET. We were under pressure to pass along the resin price increases and made investments in the conversion to plastic,'' Avery told an audience of analysts and industry heavyweights at the Packaging Industry Outlook and Review, held Sept. 27-28 in New York.
Crown Cork announced the closings the day after Avery's presentation. The firm incurred an $83 million pretax charge in the third quarter, ended Sept. 30, to reflect costs associated with restructuring its North American container business.
The estimated pretax savings accruing from the shutdowns is expected to reach $36 million and affect seven plants in North America.
In this phase of the restructuring, first announced in March 1994, two aluminum beverage can plants and one beverage end plant will be closed, while one more can plant will be off-line for 1996 while machinery is updated. Two food can plants will be closed and two food can concerns overseas will be consolidated at one location.
In the meantime, Crown Cork continues to pursue international expansion projects. Avery said the firm will continue building metal can plants in China and Vietnam to keep pace with the global expansion of its soft drink company customers.
Also, Crown Cork's proposed merger with CarnaudMetalbox of Paris is being reviewed for a second time by the European Commission this month.
``We anticipated that we would reach the level of another review,'' Avery told conferees. ``We don't see that this will really delay the deal.''
Crown Cork, one of the largest metal, glass and plastic container makers in the world with an estimated $5 billion in annual sales, proposed to buy CarnaudMetalbox, also one of the top container makers worldwide, with about $4.5 billion in annual sales, in August. The merger was approved by the commission in its initial stages, and has the approval of the French Treasury.