Packaging firm CCL Industries has announced plans to shut down an aerosol manufacturing operation situated in Penetanguishene, Ontario.
The company will consolidate the Canadian plant’s sales volume into existing operations in the US and Mexico with an investment of approximately $25m.
The investment will be used to increase the capacity and infrastructure of CCL’s Hermitage, Pennsylvania and Guanajuato sites, as well as new aerosol production line planned for installation in mid-2014.
The company intends to spend approximately $4m from mid-2014 through the first half of 2015 in other one-time transition costs, and is targeting an increase of $10m to its existing annualised earnings before interest, taxes, depreciation, and amortisation (EBITDA) $30m run rate, after completing the consolidation process in mid-2015.
CCL Industries president and CEO Geoffrey Martin said that since 2009 the plant has been unprofitable and has posted sizable losses throughout the economic crisis.
"Our operation in Ontario now exports its entire output into the US; distance from key customers and the step change rise of the Canadian dollar over the last decade combined to significantly impede competitiveness," Martin added.
"We firmly believe this decision was essential to optimise 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 US and Mexico."
CCL plans to commence closing activities in the first half of 2014 and complete the process by mid-2015.