Naperville-based Portola Packaging said it will make $12 million in capital investments to its Kingsport, Tenn. and Tolleson, Ariz. facilities.
In addition, the manufacturer of stock and custom tamper-evident plastic closures and containers for dairy, juice and other food segments will close a facility in Batavia, affecting about 76 employees.
The investment is being made to accommodate growing market demand for its hot-fill and aseptic beverage closures and increased dairy business market share, the company said in a release.
Some of the new capital improvements are already under way, with completion expected by the end of the third quarter. New investments are being made in additional high-speed compression and injection molding equipment as well as in existing production line upgrades. The company projects that approximately 30 production employees will be added to those locations when the increased capacity is operational.
This investment comes on the heels of a previous substantial expenditure-also in high-speed compression and injection molding capacity-made over the past three years. Infrastructure replacements and upgrades will also be made.
Over the past three years, Portola has grown its beverage closure volume by double-digit percentages annually. Manufacturing and quality initiatives, coupled with new stock and custom closures for tamper evident, aseptic and extended shelf-life applications are responsible for part of the growth-particularly in the juice, dairy and specialty beverage market segments.
"Our focus on lean manufacturing, reliability-centered maintenance, and product rationalization has allowed us to increase unit throughput per employee by 43 percent over the past four years," said Kevin Kwilinski, president and CEO of Portola. "After the additional capacity is fully operational, we expect to exceed a 75 percent improvement for the same metric."
Portola will begin tapering off production at its Batavia plant in the middle of April, the company said, with the facility closing no later than August. Geographic location of expected growth opportunities and the level of investment which would have been needed to upgrade this facility were factored into the decision.
"Our Batavia facility has been producing closures for Portola for the past 20 years. After extensive analysis and careful thought, we came to the conclusion that closing this facility and upgrading production at our other two plants was the best decision for our customers and company," Kwilinski said.
The Batavia facility also housed 15 corporate employees in the engineering, quality, and research and development specialties. That staff will join the rest of the corporate employees in a new, larger corporate headquarters facility in the Naperville area.
"Our new and improved U.S. manufacturing footprint will effectively enable us to service our existing customer base while providing a footprint for growth over the coming years," Kwilinski said..
Portola Packaging will operate nine manufacturing facilities around the world: two in the United States, three in Canada and one each in Mexico, the United Kingdom, Czech Republic and Russia.