Amcor Ltd. is closing plants around the world, including two in the United States, and said it will spend the next two years cultivating returns from its three-year acquisition spree.
Manchester, Mich.-based subsidiary Amcor PET Packaging will close two PET blow molding plants by the end of the year in Merrimack, N.H., and Tucson, Ariz., and lay off 176 workers. Most of the equipment at the two sites will be relocated to other Amcor plants, said marketing director Shelley Steele.
The decision, announced Aug. 19, fits with the push by Amcor Ltd. of Melbourne, Australia, to cut costs. In an Aug. 19 earnings release, the parent said it plans to close eight facilities worldwide in the next six months and reduce head count by 900, primarily in PET and flexible packaging operations.
Amcor PET Packaging is evaluating its operations, primarily those for soft drink and water containers, Steele said. Until the review is done, the firm will not invest more in the soft drink/water segment.
``We have to be vigilant in this business,'' she said.
Amcor PET Packaging recorded nearly $2.28 billion in sales worldwide for fiscal 2004, which ended June 30. However, while sales were up for its North American operations, profit was down 13 percent. Strong pricing pressure from Amcor's large customers contributed to margin declines, the company said.
Amcor already has closed two U.S. plants in the Northeast and has reduced jobs at its Calgary, Alberta, injection molding plant. Still, while some plants are closing, It also will move blow molding work into a 64,000-square-foot addition to a Campbell Soup Co. plant in Napoleon, Ohio. Campbell owns the plant, but Amcor will provide equipment and employees.
``We're adding one and subtracting two,'' Steele said. ``We're maintaining customer relations and businesses by relocating PET locations in most cases.''
The Merrimack plant has a long history in PET containers dating back to 1978, Steele said. Amcor bought the Tucson plant in 2001 from CNC Containers Corp. of Tumwater, Wash.
Both facilities make bottles for soft drinks and water, and the Merrimack plant also makes hot-fill containers for juices and isotonic beverages, Steele said.
Amcor PET Packaging will spend about $40 million to restructure its operations and close plants, according to the earnings release. The firm still has about 29 plants in North America and close to 6,000 workers, Steele said. The company is one of the largest blow molders in North America, with $1.2 billion in relevant sales in 2003.