Dec 24 2012
Constar International LLC, a leading global producer of plastic containers for food and beverages, which has previously announced its intention to focus on plastic packaging for technologically advanced and specialty applications, announces actions that will reduce its exposure to the commodity carbonated soft drink (CSD) market.
The high volume CSD bottle market, in which Constar was a pioneer, is rapidly shifting to self-manufacturing driven by machine technology available to CSD fillers. “Now a private company with financial sponsors who are willing to move decisively, we are changing both our scale and our focus,” said Andre Laus, CEO, “We are a company with leading edge technologies, but we have been too highly concentrated in commodity business. We need to direct more of our effort and resources to targeted growth opportunities in packaging markets for hotfill beverage, food, barrier, short-run and specialty products, and new applications.”
“With a large contract to supply commodity CSD products expiring at the end of 2012, we had to choose between devoting more resources to low value adding activity, or reducing that activity significantly and sharpening focus where we add greater value”, Andre Laus continued. Effective January 1, 2013, Constar’s largest supply contract for CSD plastic packaging will expire without renewal and Constar will consequently reduce operations in the two plant facilities that were dedicated to supply under that contract, Jackson, MS, and Havre de Grace, MD. The reduced operations will have no effect on production for any of Constar’s other business.
The Jackson, MS plant, which is an injection molding facility, will close at the end of January 2013. Approximately 40 Jackson employees will separate from the company between now and the end of January. The Havre de Grace, MD plant, which is comprised of a two building complex with a full range of injection and specialty blow molding operations, will concentrate operations into the larger of the two buildings. Approximately 40 employees in the Havre de Grace complex will be affected by reductions between now and the end of March 2013. At both locations, the company is meeting with the affected employees and communicating a program of transitional support that includes severance benefits and outplacement assistance.
“The markets we serve are rapidly changing and we must change too,” Andre Laus noted, “Many of the assets that were formerly dedicated to supply of commodity CSD product can be retooled to support our growth in specialty markets, but we will also continue to invest in new machines and technologies that position us to meet the evolving plastic packaging needs of food and beverage customers.”