In an effort to focus its plastic packaging business on PET and high density polyethylene rigid packaging, Tetra Pak Flexible Packaging Systems is closing its U.S. office and shifting all flexible pouch operations to India.
As a result, the division's Lincolnshire, Ill., headquarters and research and development center will close by year's end, as will its Tetra Pak pouch packaging production unit in Mexico.
Flexible pouch packaging operations will be concentrated in India, where the film is manufactured.
Tetra StarAsept, the bulk packaging system marketed through Tetra Pak Flexible Packaging Systems, will shift to another division. Marketing of Tetra Glastic high-barrier flexible material, based on Tetra Pak's production of silicone oxide-coated PET film, will stop and the material will return to a research and development phase.
Tetra Pak began its Plastic Packaging Division in 1992, beginning with flexible pouches. The product was marketed in emerging markets in Europe and the Middle East, spokesman Peter Woods said in a telephone interview.
``To succeed, flexible products must have volume and economies of scale,'' Woods added. ``And we only package liquid food; we're not in nonfood applications.''
He said the company opened an office in Lincolnshire because the United States is the technological center for plastics. However, the firm then focused its pouch business in India, the world's largest pouch market and largest milk market.
``With our business developing outside the U.S., there was no sense to have operations in the U.S., at least for now,'' Woods said. ``We are restructuring to reflect the realities of our presence in the marketplace.''
The company hopes to relocate as many employees as possible.
Woods would not disclose the exact number of people affected but said it is in the 10s, not the 100s.
Although Tetra Pak still has plastic packaging operations in the United States, the Tetra Pak Plastic Packaging Division, which now includes rigid and flexible packaging, is based in Geneva, Switzerland.
For now, the Plastic Packaging Division will concentrate on PET preforms and stretch blow molding equipment. Preforms are made in Belgium, Italy, Spain and Saudi Arabia while the equipment is manufactured in Italy. It makes HDPE containers through hole-in-wall operations in the United Kingdom. These containers serve the milk, juice, water, wine, iced tea, dairy and carbonated soft drink markets.
The Plastic Packaging Division will take responsibility for building the company's closure business, as well as expanding the PET and HDPE operations, Plastic Packaging Division President Gene Nesbeda said in a news release.
``Tetra Pak has recognized the need to build competence in caps and closures, to satisfy the total system supply strategy in the Plastic Packaging Division and the need for innovative closure solutions in the carton business,'' he said.
Currently, the company makes some closures for PET bottles.