Cascades has announced it is to close a folding carton plant in Canada by the end of Q1 2013 as part of a restructuring operation into its Norampac division.
Nearly 155 employees will be affected and customers from the Québec-based plant will be transferred to other Norampac facilities.
The firm said 40% of employees will have the opportunity to be relocated in other Norampac and Cascades units in Québec.
Norampac produces corrugated products, containerboard, folding cartons and boxboard for industries including food packaging.
A Cascades spokeswoman told FoodProductionDaily.com: "To justify the payback of such a massive investment, we needed to consolidate our operations and to reduce our operation costs.
"This means unfortunately having to close one of our facilities, to improve the general return on investment."
The decision is part of a $22m investment in its Viau (Montréal, Québec), Mississauga (Ontario), Winnipeg (Manitoba) and Cobourg (Ontario) plants.
The investment involves the modernization of equipment through the installation of two printing presses in the Viau and Mississauga plants.
The firm said the presses, one of which has a printing capability of up to seven colours and an ultraviolet drying process, were designed to offer the latest technology.
The optimization project also includes the installation of equipment in other folding carton plants, namely a new gluer in Winnipeg and forming equipment in Cobourg.
The spokeswoman added the aim was to offer better products in less time.
"...a major part of the investment will be going to the merge of the Folding carton operations of the Lachute (QC) plant and the microlitho operations of the Viau (Montréal, QC) facility.
"Aside from the new press, there will be several other equipements (sheeter and automated robots).
"We will also be able to offer our customers a more various choice of types of packagins in folding cartons and microlithography."
Key to strategy
Marc-André Dépin, president and chief executive of Norampac, said: "The folding carton market in Canada continues to be key to our strategy in the packaging sector.
“This market benefits from stable growth that closely matches that of the consumer market for food products sheltering it from the negative cycles that affect industrial products.
“Cascades occupies an enviable position in the folding carton market in Canada and these investments will allow us to consolidate and improve upon this position in the coming years."
Last month, the firm also announced the closure of a Tissue Group plant located in Scarborough, Toronto due to “restructuring operations to increase operational efficiency”.