TORONTO—Packaging and labels firm CCL Industries has announced plans to close its aerosol manufacturing plant north of Toronto, affecting 170 employees.
According to CCL, it will close the former Advanced Extrusions plant in Penetanguishene, Ont., due to a lack of profitability.
Company president and CEO Geoffrey Martin said the plant about two hours north of Toronto has been unprofitable since 2009, posting “sizable losses during the economic crisis years.”
“Our operation in Ontario now exports its entire output into the United States; distance from key customers and the step change rise of the Canadian dollar over the last decade combined to significantly impede competitiveness,” Martin said in a statement about the closure.
“Although (financial) results improved in 2012 and 2013, the operation continues to make losses; consequently we feel it is now time to make this difficult decision.”
The company said it plans to begin winding down operations at the facility in the first half of 2014, with the plant completely shuttered by mid-2015.
According to Martin, his firm will consolidate production from the plant into existing operations in the United States and Mexico, investing a combined $25-million in its facilities in Hermitage, Penn., and Guanajuato, Mexico, over 2014 and 2015.
“We firmly believe this decision was essential to optimize the CCL Container supply chain footprint and cost position to best service our important home and personal care customers, all of which are now located in the United States and Mexico,” Martin said.
Affected employees will be offered severance packages, international transfers to Container division facilities internationally and domestic opportunities at CCL Label and Avery units in Toronto and Montreal, according to Martin.
The company anticipates a one-time restructuring charge of $11-million during the fourth quarter of 2013 as a result of the closure.
Founded in 1951 as Connecticut Chemicals (Canada) Ltd., CCL has more than 70 manufacturing facilities in North America, Latin America, Europe, Asia, Australia and Africa and employs about 6,600 people worldwide.