Top European rigid plastics packaging molder RPC Group plc has given up on its money-losing blow molding plant in Oevel, Belgium, which it plans to shut down by the end of the year, cutting about 150 jobs.
Investment in new equipment, management changes and work force cuts at the plant, acquired from Schmalbach-Lubeca AG in 1997, have been to no avail. RPC said that left it with no alternative but to close the facility. The company said the shutdown will cost £0.5 million (US$15 million).
Meanwhile, RPC is investing almost £4 million ($21.5 million) to injection mold margarine tubs in Britain and Germany for global foods giant Unilever NV. The plan includes the purchase of a plant in Old Dalby, England, where RPC is installing five 600-ton injection presses.
Unilever is switching its margarine packaging away from thermoformed tubs, produced at RPC Bebo Plastik GmbH in Bremervorde, Germany.
Back in 1997, RPC of Raunds, England, accepted the challenge of turning around four unprofitable Continental Plastics Europe plants it bought from Schmalbach. Two operations already have turned the corner, according to RPC finance director Chris Sworn.
However, the company has been defeated by a welter of problems at the old Belgian facility, among them 30-year-old molding machines and a growing shortage of skilled workers. Older, skilled workers were lost in an earlier layoff by RPC of 30 employees largely because Belgian law requires the oldest to go first, according to Sworn.
A final nail in Oevel's coffin was the recent loss of a major contract to supply Fairy Liquid detergent to Procter & Gamble Co. for export to Japan. The business went to local molders in Japan.
P&G gradually is replacing its old-style, low density polyethylene Fairy Liquid bottles with PET.
``Management moves, new investments and changes in working practice have all proved ineffective, and the recent loss of some major export business to indigenous suppliers leaves us with no sensible alternative,'' RPC Chairman Peter Williams and Chief Executive Officer Ron Marsh said in a joint statement.
They reported RPC had experienced ``a testing year'' in the face of soaring resin prices. Acquisitions helped to boost sales by 20 percent, to £356 million ($509 million), while profit remained static at £23 million ($32.9 million).
Other changes during the past year in the RPC empire include a small plant acquisition in Poland and a halt to polystyrene food-tray thermoforming at the Bebo Nederland BV plant at Beuningen, the Netherlands.
In Kruszwica, Poland, RPC invested about half a million pounds ($715,000) to establish an in-plant margarine tub thermoforming unit for a French dairy. The unit has one extrusion line and two Illig forming lines, Sworn said.