Priority Plastics Inc. is closing a manufacturing facility in Las Vegas later this year and shifting that production across two other facilities in Arvada, Colo., and Grinnell, Iowa.
The blow molder announced March 4 it will shut down the Las Vegas location in August. The 102,000-square-foot facility, opened in 2006, produces blow molded canisters, packers and custom high density polyethylene containers. It employs 24 full-time workers, predominantly in production. All employees are eligible to transfer to other locations within the company. Customers of the Las Vegas facility will now be serviced from Priority Plastics' Arvada plant, near Denver.
As part of the restructuring, the Arvada and Grinnell locations will absorb the Las Vegas plant's manufacturing assets, including HDPE production for canisters and bottles.
The 80,000-square-foot facility in Arvada was formerly used by CCW Products Inc., a blow molder of PVC and PET containers. Priority Plastics purchased CCW in 2013.
Today, the full-service plastic packaging plant manufactures FDA-approved food grade PVC and PET containers in more than 150 sizes for the snack, pet food, novelty and hardware industries. The site has 83 full-time workers. Five to 10 additional employees could be hired as production increases.
"It allows us to continue to service our customers," Scott Dowrey, president of Priority Plastics, said in a March 13 phone interview. "It strengthens the volume at our plant in Denver, and it opens up a little bit more geography for us where some of our growth is coming from."
Dowrey said the restructuring is part of a three-year business plan that maximizes manufacturing assets across three facilities that have additional space for growth. This includes the Arvada and Grinnell sites as well as the company's industrial facility in Portland, Ind., which now solely houses production for tight-head containers.
"Our plan is that we will have a fairly stagnant year in revenues this year with some of the movements we've made in all three of our plants, but we don't expect very much of a decrease at all," Dowrey said.
That sets the company up for a projected 18-20 percent growth in sales next year, he added.
Priority Plastics is No. 29 on Plastics News' annual ranking of North American blow molders. In 2017, the company generated sales of $65 million.
The big-picture strategy also allows Priority Plastics to expand its current HDPE product line into the nutraceutical, personal care and food markets. HDPE and PET canisters for cannabis, specifically, represent a big opportunity for the company, too.
“I think everybody has their eye on this market,” Dowrey said. “Right now, between Canada and the United States, both markets are at about $10 billion in revenue, and the U.S. is expected to grow — even without full legislation for the product to be legal throughout all the states — it's still projected to grow up to [an additional] $50 billion over the next three to five years.”
Colorado and Washington were the first states to legalize the recreational use of cannabis in 2012.
Last year, marijuana sales topped $1.55 billion in Colorado alone, according to a Feb. 12 report from the Colorado Department of Revenue. To date, marijuana sales in the state have surpassed $6 billion since Jan. 1, 2014, when commercial sales of the drug opened to the general public.
If, or when, cannabis becomes legal in all 50 states “that market [for cannabis packaging] could explode up to $150 billion to $200 billion,” Dowrey said.
Priority Plastics makes extrusion blow molded bottles such as tight-head containers, motor oil and other automotive bottles, and series and stock containers, among other products. It also injection molds polypropylene lids. The company employs 320 across its operations and has additional manufacturing operations in Mesa, Ariz., dedicated to clean room blow molding for high-purity chemicals.
