Bottle supplier Constar International Inc. will close its plant in Houston by the end of May, affecting 43 employees.
According to recent Securities and Exchange Commission filings, the decision to close the 195,000-square-foot facility ``resulted from previously disclosed customer losses and a strategic decision to exit the limited extrusion blow molding business.''
Forty-three employees at the Houston facility will be offered severance packages or be relocated to other Constar plants, plant manager Ellis West said in a May 2 telephone interview. The plant, originally opened by Sewell Plastics Inc. in 1981, has two PET blow molding lines and three high density polyethylene extrusion blow molding lines, he said.
Philadelphia-based Constar will continue to ship PET bottles to Houston-area customers from its plant in Dallas, West said.
``This is just a moderate adjustment to our manufacturing facilities,'' said Scott Pleune, the company's vice president of marketing and business development. Constar expects to save $2 million annually as a result, he said.
The Houston closing will leave Constar with 14 U.S. plants and one in the Netherlands, according to recent SEC filings.
The company, whose major clients include PepsiCo Inc., reported a 2007 loss of $26.3 million on sales of $881.6 million. In 2006, Constar reported a loss of $10.3 million on sales of $927 million.
Since being spun off in 2002 from Crown Cork & Seal Co. Inc., Constar has underperformed, several packaging analysts said.
Tim Burns, a research analyst with Solon, Ohio-based Cranial Capital Inc., said Constar and its competitors have been caught in recent years in the shifting sands of PET bottling, as beverage giants PepsiCo and Coca-Cola Co. have moved from contract bottling to in-house production, while at the same time feedstock prices have risen.
``There's excess capacity and companies are more and more looking at where the plant is uncompetitive or where the plant has a bad contract that calls for lower prices,'' Burns said.