Portola Packaging is to shut one site while expanding two others as part of a $12m investment in its closure business.
The firm said production at its Batavia, Illinois plant will wind down from the middle of April and close by August this year, affecting 76 employees.
Portola said it factored regional growth opportunities and the level of investment needed to upgrade the facility into the decision.
However, the $12m capital expenditure investment to expand capacity at Kingsport, Tennessee and Tolleson, Arizona was being driven by growing market demand for hot-fill and aseptic beverage closures, said the company. Increased dairy business market share was another factor, it added.
The expansion in capacity at the two sites was another reason for shutting down the site that had been producing closures for the last 20 years.
“After extensive analysis and careful thought, we came to the conclusion that closing this facility and upgrading production at our other two plants was the best decision for our customers and company,” said Kevin Kwilinski, president and chief executive officer.
The Batavia facility also housed 15 corporate employees which will join other corporate staff in at a facility in Naperville, Illinois.
Completion of the capital improvements are expected by the end of the third quarter, including high-speed compression and injection molding equipment and existing production line upgrades.
The company projects that 30 production employees will be added when the increased capacity is operational.
Lean manufacturing focus
Other upgrades include process water capacity, heating, ventilation, air-conditioning and dehumidification, electric power service and distribution and resin delivery to maximise efficiency.
“Our focus on lean manufacturing, reliability-centered maintenance, and product rationalization has allowed us to increase unit throughput per employee by 43% over the past four years.
“After the additional capacity is fully operational, we expect to exceed a 75% improvement for the same metric,” concluded Kwilinski.
Portola Packaging will now operate nine manufacturing facilities, two in the US, three in Canada and one each in Mexico, the UK, Czech Republic and Russia.
The firm had earlier announced it was to focus on beverage closures by closing its cosmetics segment by the end of last year as it saw potential in non-carbonated markets for aseptic, hot fill, extended shelf life and closures and bottles.