Berry Global Group Inc. is shuttering 15 sites and said more closures could be on the way as part of plan to cut costs and improve efficiencies.
The Evansville, Ind.-based plastics processing company talked about plans to trim its global manufacturing footprint on its most recent conference call to discuss quarterly earnings results.
"We believe '23 will see challenging overall market demand. In turn, we're making long-lasting structural cost improvements while advancing our strategic initiatives to exit 2023 a much stronger and more focused company," CEO Tom Salmon said on the conference call.
A Berry spokeswoman declined to indicate which sites are closing and how many employees are losing their jobs.
"We are unable to release the list of facilities. Our divisions continually review our overall manufacturing footprint to ensure efficient service to our customers," the company said in a May 8 email.
Related: Tooling focus gives Berry another avenue for growth
The move to close facilities comes as Chief Financial Officer Mark Miles indicated that demand for Berry products was modestly below expectations for the first half of the company's 2023 fiscal year.
The CFO said the company "will take proactive structure cost reduction actions" to help offset that demand decrease. "As part of this initiative, we are in the process of rationalizing 15 facilities across the world, moving the business to more efficient cost facilities in addition to other labor cost reductions from improved productivity."
Salmon called the moves a "proactive stance" to lower costs and said the company also is looking to further investments in automation.
While the company indicated there are 15 facilities being closed, Salmon said Berry continues to look other potential sites. "We have an additional pipeline of facilities we are giving consideration to. Some of which we'll be able to execute on," he said.
"We will focus on our internal cost-reduction efforts and inflation recovery while also driving strong cost benefits through efficiencies and asset optimizing throughout our global footprint," Salmon said.
Part of Berry's strategy is to look at lower-cost facilities' ability to produce and deliver products to nearby higher-cost locations.
That includes the potential to increase production in locations such as Eastern Europe to supply Western Europe, India to supply elsewhere in Asia and Mexico to produce products for North America.
"It's an active part of the review we do on a regular basis," Salmon said about the company's decision to close sites. "We've got additional plans we're considering. It's all about what puts us in the best position geographically and from a cost perspective to serve our customers bases more effectively."
Berry currently indicates the company has more than 265 sites and 46,000 employees around the world.