Ball Corporation is to close two North American beverage manufacturing plants by the end of the year due to lack of demand for 12-ounce beverage cans.
The company said its existing 12-ounce beverage can and end facilities in Colombus, Ohio and Gainesville, Florida will cease production at the end of 2012.
Its Columbus plant employs 110 people and operates two of four existing lines that produce standard 12-ounce cans.
The Gainesville plant employs 125 people and produces several different beverage can ends for standard can sizes.
Ball will continue to operate 17 beverage can plants in North America and plans to boost its speciality beverage can capacity in the future.
Market decline for years
Ball spokesman Scott McCarty told FoodProductionDaily.com the firm will continue to manage cost structure as 12-ounce cans continue to decline.
“If you look at CMI industry numbers, the North American beverage can market – the majority of which is 12-ounce cans – has been declining slightly for several years after it had previously increased slightly for several years.
“While to some degree these changes do over time tend to ebb and flow, this is the fourth year of an economic recession and continued economic uncertainty is negatively affecting consumer spending on all kinds of products.”
Ball expects to record a total after-tax charge of $30m, for employee severance and benefits and facility shut down costs with the majority expected to be recorded in the third quarter of 2012.
When asked if this would open up opportunities for competitors, he said: “These actions are consistent with our focus on creating long-term growth for our company and returning value to our shareholders.
“If you look back over the past 12 years or so, Ball has taken many strategic steps to actively manage our overall cost structure, pursue new specialty can opportunities and better position our manufacturing footprint to meet changing market conditions.”
Specialty can growth
McCarty added Ball is pursuing new angles in the market, specifically the specialty can business.
“The cans and ends made in Columbus and Gainesville are not for specialty packages, they are for standard 12-ounce cans and demand for those cans has declined.
“We are seeing demand growth for different can sizes, for popular packages such as Ball’s Alumi-Tek bottle and for features like our photo-quality Eyeris graphics.
“We are investing in the specialty side of our business to meet that demand.”