Berry Global Group Inc. has closed 20 facilities but remains tight-lipped when it comes to details about most of the closures.
Update: An Illinois plant will change from manufacturing to distribution, resulting in 82 jobs lost.
The Evansville, Ind.-based firm had indicated in May that 15 locations would close, adding at the time more could be shuttered as well.
That potential for more sites being closed has come true, with CEO Tom Salmon indicating Aug. 9 that 20 facilities have been impacted.
His comments revealing the number of closed facilities came deep into a conference call to discuss quarterly earnings. Salmon, in his brief comments about the closures, did not indicate how many people have lost their jobs.
"We're going to be in a position in '24 as we see growth and general market environments improve. Also, we're going to benefit from having actually executed against 20 facilities that have been shut down and not having to need ultimately to add incremental [capital expenditures] to serve that business. So it's very exciting for us going forward that optimized footprint, lower cost structure ultimately is going to benefit us on the bottom line as well," Salmon said.
Berry, when reached for further details about the closures after the conference call, said company officials were "not available for interview at this time."
The company did release the following short statement: "Berry continually reviews our portfolio to determine the best asset utilization required to satisfy our customer demand. For employees at affected closures, we review and share openings at other facilities."
Berry, in another email request for details, declined to provide a list of closed facilities or the associated number of jobs lost.
"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 the email.
Berry, when asked specifically about a local report from STV News in Scotland regarding the closure of a Berry BPI Packaging Solutions facility, did provide a statement dated Aug. 8.
"Berry BPI has today announced the intention to close our manufacturing facility at Greenock with the likely loss of up to 65 jobs," the statement reads. "The company has seen reduced demand from a number of its sectors at its site in Greenock, Renfrewshire. The site supplies a range of markets including construction, industrial packaging and health care. It is widely reported in the press that activity in these markets is reduced and this has affected activity levels at the BPI site.
"As a result, BPI has regrettably had to announce a number of possible redundancies, with up to 65 roles potentially affected," the statement said.
Berry BPI also operates what it calls a financial shared service center and head administrative office from the Greenock location that will not be impacted by the proposed closure.
"Redundancy consultation has begun with employee representatives and we will endeavor, where at all possible, to find suitable alternative employment for our employees either within or outside the Berry Group," the company said.
While Berry declined to provide more information via email, the company did file a Form 10-Q quarterly report with the U.S. Securities and Exchange Commission that briefly addressed the closures.
“During fiscal 2023, the company announced several plant rationalizations in all four segments in order to deliver cost savings and optimize equipment utilization. In total, over the next three years, these plant rationalizations are projected to cost approximately $200 million with the operations savings intended to counter general economic softness. The plant rationalizations are expected to be fully implemented by the end of fiscal 2025,” the company said in the filing.
Berry divides its business into four segments: Consumer Packaging International; Consumer Packaging North America; Engineered Materials; and Health, Hygiene and Specialties.
Both volume declines and lower resin prices combined to help drive sales down at Berry by a half a billion dollars during the second quarter. And profit fell by nearly a third.
Berry earned $143 million, or $1.18 per diluted share, on sales of $3.23 billion for the fiscal year third quarter that ended July 1. That compares with earnings of $207 million, or $1.58 per diluted share, on sales of $3.73 billion for last year's third quarter.
Berry's production volume fell by 7 percent in the quarter, the company said.
"The volume decline is primarily attributed to softer demand in our consumer and industrial markets, including destocking, partially offset by strong growth in foodservice," the company explained.
The pass-through of lower resin prices also impacted overall sales, the company said.
Salmon, who is retiring from Berry at the end of the year, indicated the company's board is working to find a successor. He believes the company will announce the new CEO between now and the next quarterly conference call.
"Our board is fully engaged relative to the identification of a successful candidate to take this seat. I'm very confident between that now and our fiscal Q4 call that successor will be named and introduced to the broader market," Salmon said.
Berry now indicates the company has more than 250 locations with 46,000 employees, according to the latest numbers from the company. The number of locations was listed at more than 295 sites in a May 2021 earnings release.
