Only days after completing its acquisition of Landis Plastics Inc., Berry Plastics Corp. is closing one of Landis' five plants.
Landis' injection molding facility in Monticello, Ind., will shut down Jan. 24, affecting 250 workers at the site in rural northwest Indiana. The decision was part of Berry's continual plan to take out costs, said President and Chief Executive Officer Ira Boots on Nov. 25.
The Landis plant is surrounded by Berry and Landis facilities in that region. Berry is based several hours southeast of Monticello in Evansville, Ind.
``You have to continue to consolidate inside the plastic industry because of competitive pressures,'' Boots said. ``The plant was less productive than some of our newer facilities that have newer equipment. It's not a reflection on the employees at Monticello, but it's a fact of the economy we're in.''
Berry will direct the work at Monticello to two other former Landis facilities, Boots said.
Two-thirds of the plant's business will be parceled to a site in Alsip, Ill., and another third will go to its Richmond, Ind., molding facility. The company expects to move all the plant's equipment, he said. Alsip was Landis' largest plant, with two separate buildings and more than 460,000 square feet of space.
Workers in Monticello were notified in person Nov. 24 by former Landis President Gregory Landis and told they could transfer to other Berry facilities. The Landis family built the 184,000-square-foot Monticello plant in 1978 to make rigid, open-top containers for food and dairy products, a core line at Landis.
Key customers include Kraft Foods Inc., General Mills Inc. and Dean Foods Co. That work will continue at other facilities bought by Berry, with no other immediate changes expected, Boots said while touring the Landis plants during the week of Nov. 24.
In a deal completed Nov. 20, Berry paid $228 million to snare Landis, ramping up Berry sales from $494.3 million last fiscal year to more than $700 million. Landis employed 1,535, including the 250 workers at the Monticello site.
The Landis buildings were acquired before the deal closed by W.P. Carey & Co. LLC, a real estate investment firm in New York. Berry paid $32 million to buy those buildings before selling them to Carey. Berry is leasing back those buildings from Carey.
The banking firm will attempt to sell the Monticello building after it is vacated in January, said Cinda Kelley, executive director of the Monticello-based White County Industrial Foundation. Her development firm was surprised by Berry's announcement, as was most of Monticello, she said.
The closing leaves employees who had celebrated the acquisition news with a lingering sense of uncertainty, she said. The area, a summer tourist attraction with several lakes, had been hit hard three years ago when a tractor-trailer manufacturer packed up and left, Kelley said.
``We were just now recovering from that and about ready to take a deep sigh of relief,'' she said. ``Now, we're still holding our breath. These are going to be tough jobs to replace.''
Meanwhile, Berry is continuing with plans to expand its Tolleson, Ariz., plant, another former Landis molding operation that expects to add 120,000 square feet, Boots said. That expansion will be completed early next year, boosting the 3-year-old site to 200,000 square feet.