Packaging: Ball closes PP barrier plant in Ontario

Tag : Packaging Tins

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Jul 1st, 2008 Print this article Packaging: Ball closes PP barrier plant in Ontario
By Tony Deligio
Ball Corp. (Broomfield, CO) will shutter a polypropylene bottleblowmolding plant in Brampton, ON that it acquired in 2006 throughthe purchase of Alcan Packaging assets. The plant’s 90employees will be offered severance and outplacement services, withthe closure expected to be completed in the third quarter. OnBall’s books, the move will result in an after-tax charge ofapproximately $5 million, of which approximately $2 million will berecorded in second quarter finances. Starting in 2009, Ballbelieves the move will generate annual, fixed-cost savings of $4million.
Ball paid Alcan Inc. (Montreal) $180 million to acquire threeplastic-bottle manufacturing plants, including the Brampton site,which focused on multilayer PP containers for use in foodpackaging, particularly hot-fill items that require barrier ( link ). The deal also included Alcan facilities in Batavia, IL; andBellevue, OH, as well as certain equipment and other assets fromAlcan’s Newark, CA, operation and Neenah, WI researchfacility. Ball, which primarily produces aluminum and tin cans,branched out from polyethylene terephthalate (PET) containers forbottled water and carbonated soft drinks in 2004, with the additionof its Heat-Tek line for hot-fill beverages. That expansioncontinued in 2006 with the acquisition of the three Alcan sites.
In the first quarter, Ball’s earnings in the plasticpackaging, Americas segment were $4.8 million on sales of $188.9million, compared to $2.3 million on sales of $186.6 million in2007. Overall, first quarter 2008 earnings were $83.8 million, onsales of $1.74 billion, which was up from $81.2 million on sales of$1.69 billion in the first quarter of 2007. The company’splastics division has come under corporate and investor scrutiny,and in the first quarter 2008 earnings statement, John Hayes,executive vice president and chief operating officer said, “Wecontinue to work on improving results in our plastic packaging,Americas, segment,” adding that the first quarter improvementwas largely the result of ongoing efforts to take costs out andachieve a better mix of custom products. “We continue to focuson those factors and on additional ways to make this businesssegment economically sustainable,” Hayes told investors.— tdeligio@modplas.com