BWay Holding Co. announced May 12 in a news release that it will shutter its Cleveland plastic packaging plant by year's end.
``Productivity gains throughout our plastic packaging system have increased their capacity and now allows us to serve our customers with a smaller manufacturing footprint,'' said Kenneth Roessler, president and chief executive officer.
The Cleveland plant makes injection molded pails. All production from the facility and certain pieces of production equipment will be shifted to the company's 10 other plastic packaging facilities. BWay said the remaining facilities have ``ample capacity to meet market growth for the foreseeable future.''
It did not provide employment numbers for the facility.
BWay expects to realize $3.3 million in pretax annual savings from the closure, beginning in 2009. The company said it expects to make capital expenditures of about $2.3 million related to the relocation of assets from Cleveland. It estimated that the closing will require about $4.2 million in cash, net of expected income tax benefits.
BWay, based in Atlanta, said sales for its plastic packaging segment were $103.1 million for the second quarter of fiscal 2008, an increase of 10 percent over the same quarter last year. It attributed the increase to higher raw material-driven selling prices, partially offset by lower overall volume.
The company also makes steel containers, but bought into the plastic market in August 2003 when it acquired SST Industries Inc., a producer of pails and drums.
In July 2004, BWay added North America Packaging Corp. and has been consolidating production ever since. The company closed the three SST Industries plants by the third quarter of 2005, and combined them with the Nampac facilities. BWay, a publicly traded company, also manufactures rigid plastic tight-head containers and bottles.