Canadian packaging company Cascades has announced plans to consolidate its corrugated product plants in its Norampac division in Ontario, Canada.
The consolidation comprises a $30m investment in the Vaughan, St. Mary's, Etobicoke and Belleville plants and the closure of the North York and Peterborough units, as well as the OCD plant in Mississauga, at the end of 2012.
Norampac president and chief executive officer Marc-André Dépin said the restructuring aims to optimise the productivity in the company's corrugated product plants in Ontario.
"These steps are in line with our regional development strategy, which includes the recent acquisition of three Bird Packaging plants," Dépin added.
The decision is another step in a series of initiatives taken by the company to modernise its assets in recent years, said Cascades.
According to the company, the investment will enable Norampac to upgrade manufacturing equipment in the four Ontario plants and increase production capacity, profitability and productivity.
The company also plans to reduce its operating costs through the closure of the OCD, North York and Peterborough corrugated product plants, and will gradually redirect the production to other Norampac converting plants in the province.
The decision to close the plants, which are specialised in converting corrugated products, can be attributed to a decrease in demand in the Canadian and North American corrugated products industry, which began during the recession.
In June 2011, Cascades announced the construction of a lightweight containerboard mill, Greenpac Mill, in Niagara Falls, New York, US.