Intertape Polymer Group Inc. plans to close its Brantford, Ontario, facility by June, blaming a continuing strike by the plant's unionized workers.
After sustaining 21/2 years of unprofitable operations due to the prolonged strike at the Brantford plant, we came to the unfortunate conclusion that a turnaround was highly improbable and that it was best to close the facility by June, President and CEO Greg Yull said in a March 23 news release.
Some production will transfer to other Intertape facilities, he said. But the bulk of the work will be discontinued.
Yull said in a conference call with analysts that the company is in the process of selling the business.
As a result of the closure, the company said it expects a decrease in sales on an annualized basis of $10 million, and a positive contribution to earnings before interest, taxes, depreciation and amortization of about $4 million.
Bruce Weber, president of United Steelworkers Local 1-500, which represents the Branford employees, told The Canadian Press that workers have been on strike since August 2008.
The union represents 60 employees, he said.
Montreal-based Intertape, which is publicly traded, also released its fourth-quarter and 2010 annual financial results March 23.
Fourth-quarter sales increased 12 percent to $180.1 million, compared with $160.8 million for the fourth quarter of 2009. Yull attributed the increase primarily to higher selling prices, which partially recovered raw material cost increases.
Gross profit for the fourth quarter totaled $19 million, compared with $20.2 million a year ago.
The company posted a net loss for the fourth quarter, however. The $43.4 million loss compares with a net loss of $8.5 million for the same period last year.
The company blamed much of the loss on some one-time charges.
Fourth-quarter results were in line with expectations, however, gross margin remained under pressure due to significant raw material cost increases and competitive pricing pressures, Yull said.