Faced with plummeting European sales and mounting Asian competition for its cosmetic products, Pechiney SA plans to close one plant in France and downsize another with a potential loss of about 270 jobs. Both plants manufacture compacts for makeup.
Meanwhile, the company's Techpack International unit will center European compact manufacturing at its Laffon SpA plant in Verderiore Superior, Italy. The site currently employs about 130. A Pechiney spokeswoman in Paris said the Laffon plant will add jobs, but she did not say how many.
The plant that will close, which employs 141, is in Avallon, France. It is part of Techpack's LIR France unit. Another LIR plant, in Provins, France, will stop injection molding compacts and will become a dedicated producer of deodorant sticks. As many as 130 of its 281 workers will lose their jobs, she said.
The Laffon plant was chosen for compact production because it offered a fully air-conditioned, dust-free unit, electric injection presses and automated production lines with in-line lacquer capacity, according to Pechiney.
``LIR France's results and its manufacturing performance over the last two years have deteriorated sharply. The outlook for 2003 does not point to any improvement, particularly as market competition has become much harsher with the arrival of new Asian players,'' the spokeswoman said.
While Pechiney's food-packaging divisions fared ``rather well'' during 2002, it was the cosmetics-packaging side that felt the sharp drop in volumes.
Pechiney reported that its packaging division's 2002 profit fell 7 million euros ($7.5 million) to 129 million euros ($139 million) compared with 2001. Sales were down from 2.4 billion euros ($2.6 billion) to 2.3 billion euros ($2.5 billion).