European and American paper and packaging giants continue to shut down and lay off employees!
Smurphy Kappa said the fall in demand for its packaging cartons slowed further in the third quarter, while an initial improvement in German order volumes could bode well for a return to growth in volumes. The Irish group, Europe's biggest producer of paper packaging, had previously benefited from a boom in demand for packaged goods and e-commerce during the lockdown of the pandemic. But the drop in volumes led to an 8 per cent drop in profits in the first nine months of 2023 as the economy reopened and consumers spent more on travel and other services.
Customer demand fell about 2% in the third quarter from 2022 levels, compared with -7% in Quarter 1 and -5% in the second quarter, the company said. Chief Executive Tony Smurphy said he expects the trend to continue with order volumes in Germany, which has been "really behind" this year, up 8% -10% in the last month or so.
"I was at a customer event in Germany last week and the mood was definitely more upbeat," Mr. Smurphy said on an analyst conference call. "I don't think we will necessarily see any durable goods comeback, but I think you will see normalisation in the food and beverage business and a return to more normalised levels in the fast moving consumer goods (FMCG) business."
After a 40% increase in the price customers pay for their cartons between 2021 and 2022, prices have declined for the second consecutive quarter, falling by about 6% month-on-month. However, Smurphy Kappa CEO reiterated that he expects carton prices to rise again once demand resumes.
From Europe and the United States, packaging manufacturers expect at least 1,500 jobs to be affected by the plant closures and layoffs announced in October. The companies continued to gain insight into their footprint optimization plans and the weak demand driving some of these decisions during their third-quarter earnings calls.https://www.risedongsheng.com/
Swedish pulp and paper maker Beary, which acquired North American producer Verso in 2022, announced in its earnings report on October 25 that it would take steps in the fourth quarter to "improve efficiency and long-term competitiveness by eliminating up to 350 jobs across all businesses".
According to a worker adjustment and retraining notice received by the state on Oct. 11, Greve will permanently close a factory in Santa Clara, California, effective Nov. 15, affecting 74 employees. The Silicon Valley Business Journal, citing information from Greve, reported that the plant's costs were "among the most expensive to produce on the American continent." The plant is part of the Newark Group, which was part of Caraustar Industries when Greve acquired it in 2019.
Hood Container, which describes itself as "a company that provides factory market solutions for containerboard and kraft, corrugated boxes, graphic displays, and more," is permanently closing a facility in Matthews, North Carolina, affecting 88 employees. The Atlanta-based company issued a notice to the state on Oct. 19, and the closure is expected to take effect Dec. 19.
International Paper announced Oct. 18 that it will permanently close its containerboard plant in Orange, Texas, affecting 565 jobs. It will also halt production of two pulp machines in Riglewood, North Carolina, and Pensacola, Florida, affecting 200 and 100 jobs, respectively. In total, about 900 jobs will be affected by the changes driven by these optimization plans, the company said.
Novolex will close a factory in Coldwater, Ohio, where its brand Shields manufactures films and flexible packaging, according to a notice issued by Ohio on October 2. Layoffs are expected between December and March next year, and the closure will affect 59 employees.
According to a notice filed with North Carolina on October 26, Printpack will permanently close a factory in Hendersonville, North Carolina, on December 31, affecting 90 employees.
Silgan Containers will lay off 70 workers at a metal can manufacturing facility in Hupston, Illinois, according to an Oct. 2 notice. Silgan said in its third-quarter earnings report Oct. 25 that the company will conduct "staffing optimization" by the end of 2025 as part of a $50 million cost-cutting program.
According to a notice issued to Indiana on October 10, Sonoco will permanently close a plastic packaging, film and sheet manufacturing facility in Fremont, Indiana, on December 15. The company said the closure will affect 53 employees, with further layoffs expected on June 30, 2024.
Ardagh Metal Packaging, Inc. disclosed in its Oct. 26 earnings report that it may close its beverage can production plant in Whitehouse, Ohio. The plant, which employs about 107 people, has been part of AMP's manufacturing operations since 2016. "While the possibility of closing the plant is a difficult step for our team members and the community, we must take steps to balance capacity and demand," Jens Irion, CEO of AMP North America, said in a statement, noting that the company is "exploring ways to increase regional manufacturing efficiency." A final decision is expected on Dec. 31. During the earnings call, executives also discussed ongoing efforts to optimize the company's European operations, which include closing certain remaining steel production lines in Germany and moving to more efficient aluminum production lines.https://www.risedongsheng.com/
Graphic Packaging International announced on October 4 that it was permanently decommissioning its K3 coated recycled cardboard machine at its Kalamazoo, Michigan plant, which went idle in July. The company said the move was part of its optimization plan. "The permanent retirement of K3 will support CRB's more efficient resource utilization and profit improvement goals as K2 meets its expected quality, cost improvement and quantity commitments ahead of schedule," the company said in the announcement.