AptarGroup closing two plants, buying Fusion Packaging

Specialty packaging injection molder AptarGroup Inc. is consolidating manufacturing in North America by closing two plants, in Stratford and Torrington, Conn.

The company also announced plans to buy Dallas-based Fusion Packaging I LP, a maker of cosmetic packaging products, and officials are also talking about the impact of the coronavirus on its operations.

Crystal Lake, Ill.-based Aptar, which is publicly traded, reported its fourth-quarter results on Feb. 20 and discussed them with financial analysts on Feb. 21.

On consolidation, Aptar President and CEO Stephan Tanda said it will cost about $20 million to close the two Connecticut plants by the end of 2020. He said the company would rationalize production capacity into its other North American plants.

"We continuously evaluate and optimize our operations to adapt to changing market conditions to ensure we are delivering the very best to our customers," Tanda said. "With these changes we will be in a better position to serve our North American beauty and home customers, and focus on long-term profitable growth."

He said Aptar has consolidated plants in other regions as well, including in Argentina, Indonesia and India.

The Stratford plant employed 207 and made caps and pumps, according to a 2016 news report. The Torrington plant won a state sustainability award in 2014 for replacing hydraulic injection presses with more efficient electric machines.

In response to questions, Tanda said the company does not plan to consolidate any additional North American production. He added that in 2019, Aptar sold an injection molding plant in Libertyville, Ill., to Flex Ltd., which has continued to mold closures for Aptar.

Aptar has added manufacturing capacity in China in the past year, buying a 49 percent equity interest in three related companies: Suzhou Hsing Kwang, Suqian Hsing Kwang and Suzhou BTY. Those companies make decorative metal components, metal-plastic subassemblies, and complete color cosmetics packaging products.

Tanda said Aptar does not have any operations in the Wuhan, China, region, and none of its employees have been infected with the coronavirus.

In early February, Aptar received special permission from the Chinese government to restart production, prior to the end of the Chinese New Year holiday, to help supply much-needed pharmaceutical products. But the coronavirus is still limiting Aptar's production.

"We are ... experiencing some labor shortages, due to government restrictions and the movement of people," Tanda said.

"On the one hand, of course, its great that nobody was infected and our plants are running. But our plants are only running about 50 percent in China because we can't get our workers to return to the factory because of travel restrictions," he said.

Aptar announced Feb. 14 that it entered into a binding agreement to buy Fusion Packaging, which goes by the FusionPGK brand name. Terms were not disclosed.

FusionPKG was founded in 2004 by Jonathan Gross and Derek Harvey. The company employs about 100 and generated 2019 sales of about $80 million, according to Aptar.

FusionPKG has sales and design offices in New York and Los Angeles and operations in Paramus, N.J., and Zhejiang, China.

Tanda said FusionPKG complements Aptar's current North American business, and he added that he sees "great potential" to scale its model in Europe and other regions.

In a news release, Gross added: "Our culture is based on innovation, speed to market and flawless execution. Having Aptar's resources will bolster our products and services, meeting the high demands of fast beauty."

Aptar was No. 5 on the most recent Plastics News ranking of North American injection molders, with estimated 2018 molding sales of $890 million. Its most recent big acquisition was the $555 million deal to buy Auburn, Ala.-based CSP Technologies Inc. in 2018.

Aptar reported 2019 sales of $2.86 billion, up from $2.76 billion in 2018. It posted adjusted earnings before interest, taxes, depreciation and amortization at $141 million.