MONTREAL (June 26, 12:45 p.m. ET) — Flexible packaging producer Intertape Polymer Group Inc. will reorganize operations at two of its North American plants.
The company will close its plant in Richmond, Ky., and transfer some of the operations from its plant in Truro, Nova Scotia.
The Richmond plant produces tape products. Intertape will move the majority of production to its plant in Carbondale, Ill.
In a June 26 news release, the company said the plant closure was partly due to productivity improvements at its other locations.
Intertape will stop producing shrink film at its Truro plant and move those operations to its Tremonton, Utah, plant.
The Truro plant will continue to make woven fabric products – the bulk of the plant's operations – and will retain its 30 employees, a company spokesman said by phone.
The Richmond plant has 50 employees. The company will help those workers secure employment elsewhere, the spokesman said.
The reorganization should be completed by the end of 2012 or beginning of 2013. Transitions should be seamless to customers and should not have a significant impact on sales, President and CEO Greg Yull said in the release.
The reorganization is part of a company-wide plan to maximize production and improve efficiency, the spokesman said.
With the reorganization, the company expects a positive contribution to adjusted earnings before interest, taxes, debt and amortization (EBITDA) of more than $5 million in 2013 and approximately $6 million in each subsequent year, Yull said.
The company reported an adjusted EBITDA of $63 million in 2011.
Intertape will take a charge of $14 million to $16 million in the second quarter of 2012 to cover the cost of reorganization — namely property, plant and equipment costs, and severance pay. The reorganization plan will cost approximately $5.5 million in capital expenditures.
Intertape, which has headquarters in Montreal and Bradenton, Fla., reported sales of $787 million in 2011. The company currently has 1,800 employees at 19 locations, including 12 manufacturing plants in North America and one in Porto, Portugal.