Bemis Co. Inc. is closing two plants and will separately cut another 300 jobs as the plastics packaging maker looks to slash millions of dollars in annual costs.
The Neenah, Wis.-based company, which makes both flexible and rigid plastic packaging, revealed plans June 30 to close two unnamed facilities, one this year and one next year.
Bemis also will reduce what it called "its administrative support cost structure" by cutting 300 jobs in the company's global administrative staff during the next three years.
Overall, Bemis wants to achieve $55 million to $60 million in annual cost savings. The changes will cost $100 million to $120 million to implement over time.
Bemis is the largest film and sheet maker in North America according to Plastics News' annual ranking with an estimated $2.7 billion in sales in the region and more than $4 billion in corporate sales globally.
Closing the two plants will cut costs by about $10 million, and cutting administrative staff will save another $20 million.
News of the latest job cuts and plant closures comes after the company previously eliminated about 200 manufacturing jobs in late March and early April. Bemis previously said the company expected increased business in 2017 and ramped up its workforce, but that did not materialize as customers started to lower volume outlooks.
In discussing current challenges during the company's first quarter earnings conference call in April, Bemis CEO William Austen signaled there would be more cuts to come.
"Improving the performance of our U.S. packaging business is a key priority in creating value for our shareholders," Austen said in a statement when announcing the latest cuts.
"We are focused on improving our business and further positioning ourselves for long-term profitable success. As we begin to implement the first steps of the cost savings plan in 2017, we will also continue our comprehensive review to finalize the remaining cost savings."
The company, Austen said, also will examine future capital expenses and examine its business in Brazil, a country that is facing a challenging economic environment.
Despite the current challenges, Austen said, "the strong foundational elements of Bemis Co. remain unchanged," and the company will continue paying a dividend and returning free cash flow to shareholders. The company also will look for growth opportunities.
Bemis Co. officials could not be immediately reached for comment June 30, but the firm did indicate additional details will be released in the coming quarters.
Bemis expects to achieve 5 to 10 percent of the latest cost savings this year, 50 to 60 percent next year and the balance in 2019.