In the face of fierce competition by cost-cutting US rivals, Consumers Packaging Inc. of Canada announced on 12 February that it intends to close its Hamilton, Canada, plant in early May 1997 and shut…
In the face of fierce competition by cost-cutting US rivals, Consumers Packaging Inc. of Canada announced on 12 February that it intends to close its Hamilton, Canada, plant in early May 1997 and shut several US operations to cut excess manufacturing capacity. Canada“s only glass container producer said about 360 production and 40 salaried workers will be affected in Hamilton, 15% of its 2,600 Canadian employees. The Company said it would be working with the union and government manpower services to initiate retraining and job relocation opportunities. The Canadian firm also said it will close two recently acquired plants this spring – a glass furnace in Connellsville, US, and a plant in Dayville, US. Closing the Hamilton plant, one of seven Consumers has in Canada, “will go a long way toward ensuring the financial health of the company and the jobs of the balance of employees,” said Consumers general counsel Glen Walters. Intense competition and a contracting North American glass container market have prompted cost-cutting, consolidation and closures throughout the industry, he said. Consumers recently acquired controlling interest in 11 plants formerly owned by Anchor Glass Container Corp. of Tampa, US, making it the third-largest glass container maker in North America, behind Owens-Illinois Inc. and Ball-Foster Glass Container Co. Upon the closing of that deal, it was announced that one of the 11 plants, in Houston, US, would cease operations immediately. Consumers chairman and chief executive officer John Ghazanavi, who controls 62% of the company“s shares through G&G Investments Inc. of Pittsburgh, US, said in a statement that the company will now be able to produce the same volume of products in Canada with six plants instead of seven. Consumers will shift the work to its other plants in Ontario, Quebec, New Brunswick and British Columbia. The company has invested approximately US$ 150 million in equipment in the past three years to improve production at those plants, the statement said. Walters said Consumers does not expect sales to drop more than 4% or 5% as a result of the closure. The effect of the plant closures will be reflected in Consumers“ first-quarter financial statements but will not require any special charge against 1997 earnings, he added. Consumers expects annual revenue of US$ 1.3 billion in 1997, compared with US$ 450 million for 1996.