Rexam plc will close its Constantine, Mich., plastic packaging plant by Sept 30.
The plant, which started in 1972, employs 240 and makes plastic caps for beverages, including soft drinks and bottled water. Rexam Americas spokesman Greg Brooke said the facility mostly processes polypropylene, with some high density polyethylene capacity.
In a Feb. 17 news release, the London-based packaging giant said the closure further aligns its manufacturing capabilities, improves overall asset utilization and helps balance industry capacity and demand.
Brooke said Rexam acquired the plant in 2007 as part of its $1.8 billion purchase of the plastics packaging assets of Owens-Illinois Inc.
Production at Constantine will be absorbed by other Rexam facilities. Affected employees will receive severance packages and outplacement assistance.
The Michigan plant is part of Rexam's global plastics business, which operates more than 45 plants and employs about 15,000, serving the health-care, closures and personal-care markets.
News of the plant closure arrived the same day that Rexam released its full-year 2009 earnings. The firm reported profit of about 285 million pounds ($449 million) on sales of about 4.9 billion pounds ($7.7 billion), compared with profit of 328 million pounds ($517 million) on sales of 4.6 billion pounds ($7.3 billion) in 2008.
In a statement to investors, CEO Graham Chipchase said 2009 was a challenging year, particularly for personal-care products and beverage closures, and 2010 promises to be another tough year in consumer markets.
“However, [Rexam] produced a strong cash performance, our cost-reduction program is ahead of plan and we delivered record efficiencies [in 2009],” he said. “As we benefit from the cost-saving measures we are taking, overall we expect our performance to improve in 2010.”
Chipchase added that health-care products were strong for the company throughout 2009, and that Rexam sees continued strength in the sector for 2010.
The company said plastics packaging sales were down 174 million pounds ($274 million), or 12 percent, in 2009.
Chief Financial Officer David Robbie told investors that cost-cutting measures in plastics packaging saved 8 million pounds ($12.6 million) in 2009, and the company is on track to realize savings of 22 million pounds ($34.6 million) in 2010. Cutbacks reduced Rexam's headcount in that segment by 10 percent, or 1,100 people, and two plastics plants closed, with a reduction in injection molding capacity of 5 percent.
In 2009, Rexam closed a foam pump plant in Pompano Beach, Fla., and a plant in Holden, Mass., that molded packaging trays for Gillette razors, and sold an industrial containers plant in Sussex, Wis., to its management.
Rexam has announced that a food and beverage closures plant in Hamlet, N.C., will close this year, as will the Michigan closures plant and a pharmaceutical closures factory in Nashua, N.H.
Plastic makes up about 30 percent of Rexam's overall business.
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