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News
August 08, 2005 02:00 AM

Restructuring Huhtamäki to cut 700 jobs, close sites

Richard Higgs
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    Consumer packaging company Huhtamäki Oyj plans to cut 700 jobs and close as many as six more plants in the latest phase of its restructuring.

    Espoo, Finland-based Huhtamäki intends to close its facility in Skelmersdale, England, which employs about 100, by the end of this year. The plant, bought from Huntsman Packaging Corp. in 1997, has fewer than 10 thermoforming lines and makes expanded polystyrene trays and containers.

    Huhtamäki also confirmed it gradually will shut down its rigid plastic and paperboard packaging operations at Göttingen, Germany, by mid-2006 with the loss of 320 jobs. The plant makes paper, PS and polypropylene cups and tubs. Some production will be switched to plants in Siemianowice, Poland, and Nules, Spain, and the remaining release-paper operations at Göttingen will move to a site in Forchheim, Germany, by mid-2007.

    The company also said it will close as many as four more unidentified sites and relocate their production before the end of 2007.

    Huhtamäki expects this phase of its two-year reorganization to save 30 million euros ($36 million) per year, but it still faces restructuring charges of around 80 million euros ($98 million).

    In addition, the group said it will take a goodwill write-down of 33 million euros ($40 million) in the second quarter of 2005, related chiefly to operations in North America.

    Early this year, Huhtamäki announced the closure of a plant in Leeds, England, that thermoformed and injection molded packaging for fresh food and consumer goods, with a loss of 65 jobs. About 70 other employees from that plant will transfer to a site in Gosport, England.

    Other cuts revealed in phase one included a reduction of 50 jobs at the group's injection molding facility in Auneau, France, and the initial loss of 70 rigid packaging operation posts at Göttingen.

    Huhtamäki Chief Executive Officer Heikki Takanen said the second round of reductions should complete the restructuring. He pointed out that the entire plan will affect about 1,000 employees, but the impact will be less due to capacity expansions at other sites.

    A rigid-packaging source in Europe said other plants Huhtamäki may close include EPS operations in Sweden and France, a thermoforming plant in Northern Ireland, and one of two thermoforming plants in Italy.

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