Continental Plastic Containers Inc. will close a plant next year in New Market, N.J., that extrusion blow molds plastic containers. About 80 people work at the 116,000-square-foot plant in New Market, said Abdo Yazgi, executive vice president of Syosset, N.Y.-based Continental Can Co., a public holding company that owns 50 percent of the blow molder via its Plastic Containers Inc. unit.
Last month, Continental Plastic shut another, 100,000-square-foot blow molding plant in Brook Park, Ohio, idling about 100 workers. In a consolidation slated to cut operating costs, extrusion blow molding equipment from those leased facilities is being moved to a company-owned plant in Baltimore, said Donald Bainton, chief executive of Continental Can.
``It was a combination of customers moving their business around, and there was business moving out of the Northeast,'' he said by telephone Oct. 30.
Some of that business has moved South, prompting the firm to open a 50-person blow molding plant in Atlanta in July - marking the blow molder's second plant opening in the South in two years; in late 1994, it started up an operation, in West Memphis, Ark. In total, Continental Plastic, based in Norwalk, Conn., employs about 1,790 at 16 plants, and had blow molding sales last year of $270 million.
Meanwhile, Continental Can has reached an agreement with privately held Merrywood Inc. to buy the rest of PCI - which comprises Continental Plastic and Continental Caribbean Containers Inc. of Caguas, Puerto Rico. Continental Can will buy 34 percent of PCI from Merrywood for $30 million by year's end, Bainton said. In exchange, Merrywood will receive warrants to purchase 150,000 shares of Continental Can stock at about $20 per share. By year-end 2000, Continental Can will acquire the remaining 16 percent of PCI from Merrywood for $15.4 million, plus interest.
Continental Can will finance the deal through PCI, with funds generated from a $45 million sale and leaseback of certain facilities, and the refinancing of outstanding senior secured notes. Bainton said owning a higher percentage of PCI will pay off in 1997 and beyond. However, the plant closings-which could cost the firm $5 million or more-and its offer for a larger piece of PCI, are likely to result in a fourth-quarter loss.