SCA Packaging North America will close four of its smallest plants and merge a fifth facility with one nearby in a series of moves to cut costs.
The consolidation will take place in the first quarter of 2005 and is likely to end soon after that, said Ron Leach, president of New Brighton, Pa.-based SCA Packaging North America. The targeted plants primarily make protective packaging used to transport goods.
The company will close facilities in Las Cruces, N.M.; Omaha, Neb.; Spartanburg, S.C.; and Sterling, Va., Leach said Dec. 17. The fifth facility, in Darlington, Pa., will be converted to warehouse space, with the foam molding work moving to a nearby plant in New Brighton, he said.
A total of 90 workers are affected by the plant closures. The Sterling plant has the largest workforce, with 47. The Las Cruces facility has 23; Omaha and Spartanburg each have 10.
SCA will give the 33 workers at the Darlington plant the option of staying with one of its two Pennsylvania sites, Leach said. Darlington performs foam molding and thermoforming, with the latter moving to SCA Consumer Packaging plants in De Kalb, Ill., and Spartanburg, he said.
Both the Las Cruces and Sterling plants also conduct foam molding of expandable polystyrene, Leach said. The to-be-closed Spartanburg facility makes rotational molded shipping containers, while the Omaha plant focuses on gel-ice temperature-controlled packaging, he said. All four plants were part of SCA acquisitions made between 1984 and 2003, when the Spartanburg plant was bought from H&R Industries Inc. of Beecher, Ill.
The company will spend about $1 million to prepare other SCA locations to receive the new work, Leach said. After the closings, the company will have 31 North American sites making protective packaging and six on the consumer side for its thermoforming business, he said.
Leach emphasized the plant shutdowns are not a reflection of the firm's health, but are being made to boost efficiency and economies of scale. In all cases, work will move to other SCA sites making similar products, he said.
``From time to time, you have to step back, look at the portfolio and [evaluate] whether you're serving customers most efficiently by keeping a facility open. Sometimes, the plants have to be adjusted.''
SCA Packaging is owned by Stockholm, Sweden-based Svenska Cellulosa Aktiebologet.