NEENAH, WIS. (Jan. 26, 5 p.m. ET) — Packaging powerhouse Bemis Co., Inc will close two additional North American plants this year, bringing the total number of shuttered facilities to five.
The Neenah, Wis.–based company will close smaller, flexible packaging plants in Newark, Calif. and Toronto, said Melanie Miller, vice president and treasurer, in a phone interview.
The Newark plant is slated to close in May and the Toronto facility will end production in December. The closures will affect 124 workers in Newark and 142 in Toronto.
Production will move to other Bemis plants in the United States.
Bemis acquired the facilities in 2010 when it purchased the Food Americas operations of Alcan Packaging from Rio Tinto plc of London for $1.2 billion.
Late last year, Bemis announced it would shutter three of its smaller facilities — plants in Oshkosh, Wis., and Flemington, N.J., ended production earlier this month, and a Longview, Texas, plant will close in May.
The company is aiming to improve efficiency and cut costs by closing the smaller plants and consolidating production into larger facilities, Miller said.
The company announced its consolidation plan in October during its third-quarter investor conference call. At the time, they had identified three facilities that would be closed. During the fourth-quarter, they completed their analysis and identified the two additional plants, Miller said.
“As we looked through spec consolidation and where best to move things, we could see a clear path of eliminating additional costs associated with these facilities,” said Henry Theisen, president and CEO, in a Jan. 25 conference call.
The consolidation plan also included a “head-count reduction” of salaried, mostly administrative staff, worldwide, Miller said. The total number of workers was not available,
The consolidation will be seamless for most Bemis customers, Miller said. “We expect to be able to readily move production.”
She added that some customers may have to find a new supplier. The closed Oshkosh plant produced stretch film and stretch tape, a product Bemis no longer offers.
“It was a very, very small product line for Bemis and one in which there are a lot of alternative suppliers,” she said. “We felt that our efforts were better focused on the more unique products that we make.”
Starting in 2013, Bemis should save approximately $40 million per year in costs, Miller said.
According to the company's fourth-quarter 2011 report, it spent $38.4 million on consolidation-related activities in the fourth-quarter and will spend approximately $45 million over the next 15 months.
Bemis, the largest film and sheet maker in North America, has 80 plants world-wide and employs approximately 20,000 workers.