Precise Technology Inc. will close one of its newer, more-sophisticated plants early next year in an effort to cut overhead and reduce overcapacity.
The company's Swedesboro, N.J., facility - a model of automated production and one of the early U.S. injection molding plants dedicated to in-mold labeling - will shut its doors by the end of the first quarter, said Mike Farrell, Precise's president and chief operating officer. Techniques honed at the Swedesboro facility will be passed to other Precise operations, he said.
The plant, which opened in 1999, serves one customer, Cincinnati-based Procter & Gamble Co., and makes one product, containers for baby wipes. Farrell said it has three to four full-time workers, plus many temporary employees. Molding, assembly and inspection are highly automated.
The facility is part of Precise's Customer Aligned Production operation, where plants make products for only one customer. The company has another CAP plant in Holden, Mass., that molds consumer products for Gillette Co.
Precise was nearing the end of its five-year contact with P&G for the wipe boxes, Farrell said. The company renegotiated to retain the baby-wipe business but had a pressing decision to make, he said.
``We ... decided that it makes a lot more sense to consolidate,'' Farrell said in a Dec. 1 telephone interview. ``It's basically just a financial matter, a decision made on volumes and pricing. We can move the business to a facility that optimizes location and better utilizes our capacity.''
The company boosted its capacity in August 2002, when it bought LLS Corp./Courtesy Corp., a sizable injection molder. That deal quickly doubled Precise's annual sales. Precise has other nearby plants in Delaware, Pennsylvania and Ohio.
Farrell said most of the Swedesboro facility's 10 Krauss-Maffei injection molding machines will move to a single site that will take on the baby-wipe-container contract. He declined to disclose which plant.
Meantime, Precise plans to open a new plant in central Europe by the end of next year and is scouting sites, he added. In Europe, Precise currently has one facility, in the Netherlands.
``We just finished budgeting and we expect a good growth year next year,'' he said.
With the closing, Precise will operate 14 injection molding and tooling plants. The company reported 2003 sales of $290 million.