A Pactiv Evergreen Michigan facility that produces food and beverage packaging will close this spring, eliminating 133 jobs.
The Evergreen Packaging LLC plant in Kalamazoo will permanently close and begin layoffs on April 25 and continue through June 13, according to a WARN Act filing with the state.
Unionized employees affected by the closure, represented by Printing, Packaging, Production Workers Union of North America, will have bidding and bumping rights, according to the WARN Act notice.
Evergreen Packaging's corporate parent, Forest Lake, Ill.-based Pactiv Evergreen Inc., also operates a facility nearby. The thermoformer produces and distributes food merchandising products and beverage cartons at plants across the U.S. and North America.
Pactiv Evergreen acquired the facilities in October 2021 from the former Fabri-Kal Corp., a maker of food service and consumer brand packaging that included portion cups, lids, clamshells, drink cups and yogurt containers for the consumer-packaged goods and industrial food markets.
The closure of the Kalamazoo facility comes as Pactiv Evergreen goes through a $6.7 billion acquisition by Novolex, a packaging and food services company that serves the retail, grocery service, institutional and industrial markets. Novolex is owned by the New York-based investment firm Apollo Global Management.
Pactiv Evergreen is the largest thermoformer in North America, according to Plastics News data, with $3.6 billion in sales in the region.
Through the third quarter of 2024, Pactiv Evergreen recorded $3.9 billion in sales, a 6.6 percent decline from a year earlier, with a $213 million net loss.
A year ago, the company launched what was described in a quarterly financial filing with federal securities regulators as a "footprint optimization" and restructuring plan that's intended "to optimize our manufacturing and warehousing footprint that we expect will improve our operating efficiency." Through the third quarter, the restructuring was on track to generate $15 million in cost savings, CEO Michael King told analysts in a November conference call to discuss quarterly results.
King said at the time that he expected the footprint optimization program to reduce Pactiv Evergreen footprint by about 10 percent over the next two years, driving $35 million in cost savings by 2026.
King explained how customer traffic at restaurants and grocery stores volumes "have continued to show the effects of lingering high prices as consumers continue to reduce their spending to fit within their budgets."
"Food at home price inflation has moderated more than food away from home prices over the last few years, and consumers have responded by shifting their spend from restaurants to the grocery store, especially in recent quarters," he said in the conference call. "Looking ahead, consumers are still absorbing the multiyear impact of elevated inflation, and we expect that dynamic will continue in the near term. That said, over the past quarter, our customers have increased their promotional activity in an effort to deliver more value to the consumer and spur demand.
"Time will tell if the promotions translate into lasting volume growth, but we do believe they've been helpful in stemming the tide in the near term."
A prior restructuring plan for the Food and Beverage Merchandising division, which makes paperboard containers including milk cartons, included closing facilities in Canton, N.C. and Olmsted Falls, Ohio, and selling facilities in Pine Bluff, Ark., and Waynesville, N.C. The division recorded $667 million in sales for the third quarter, a 6 percent decline from the prior year.