Citing a competitive market environment, Canadian corrugated box producer Cascades plans to close three corrugated product plants in Ontario by the end of 2012. In turn, other sites will be supported with a C$30m investment.
Cascades has announced the consolidation of its corrugated product plants in its Norampac division in Ontario. The consolidation translates into an investment totalling in excess of C$30m 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 unit in Mississauga.
Norampac aims to modernize manufacturing equipment in the four Ontario plants and increase production capacity, profitability, as well as productivity.
"The purpose of this restructuring is to optimize the productivity in our corrugated product plants in Ontario and enhance customer service. These steps are in line with our regional development strategy, which includes the recent acquisition of three Bird Packaging plants," explained Marc-André Dépin, President and Chief Executive Officer of Norampac.
"The decision to close the OCD, North York and Peterborough plants can be explained by a decrease in demand in the Canadian and North American corrugated products industry dating back to the beginning of the recession, as well as the large number of Norampac converting plants in Ontario. These factors, combined with adverse economic conditions, have forced us to restructure our assets in order to be more competitive" explained Mr. Dépin. The three operating units are scheduled to close at the end of 2012.
The OCD, North York and Peterborough plants are specialized in converting corrugated products. In preparation for the closures, production from these plants will gradually be redirected to other Norampac converting plants in the Province, which will continue to supply the plants' clients with the same quality and services. According to the company, a number of the employees from the three affected plants will have the opportunity to transfer to other Norampac sites in Ontario.
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