Bemis Company will close one of its Pressure Sensitive Materials plants in Ohio, US, in May, axing 115 jobs.
The factory, which opened in 1959, recorded annual net sales of approximately $45m last year and primarily manufactures solvent-based pressure sensitive materials.
Not cost competitive
Melanie Miller, vice president and treasurer, Bemis Company, told FoodProductionDaily.com the closure does not affect its packaging business.
“The $45m figure relates to sales not profit. It was not a cost competitive plant for us. It was a higher cost plant for us,” she said.
“It’s not a food packaging facility it’s a pressure sensitive materials plant that produces roll label and technical products.
“The reason behind the decision is that this is a business segment of Bemis that has had some lower volumes over the last few years and it’s a matter of adjusting to the current production lines as well as making use of our other, more modern facilities.”
Bemis Company is a supplier of packaging and pressure sensitive materials used by food, consumer products, healthcare, and other companies worldwide.
It said in a statement the plant closure will improve its market competitiveness and better position its Pressure Sensitive Materials business for long-term growth with the HQ remaining in Stow, Ohio.
“We are essentially allocating the production to more modern facilities; three in Belgium, one in Pennsylvania, one in Columbus, Indiana and one in Mexico,” added Miller.
“It’s a global business and this is a normal management procedure to boost our modern facilities and to accelerate future growth.
“Most of the employees will not move to other facilities as they are too far away. We have offered appropriate severance and transition services to them to find new employment in the area.”
$5bn global company
In 2014, the company will record a pre-tax charge related to the plant closure of approximately $30m which includes estimated costs related to the settlement of a multi-employer pension liability, employee severance and benefit costs, and fixed asset related costs.
“We are a $5bn company, we work predominately 90% in food packaging, and the Ohio plant is related to 10% that is not food packaging,” said Miller.
“Moving forward, our food packaging plants are in a great position to grow and we are looking forward to improving the profits on that side of the business in 2015.”