O-I closes first of two European glass plants
The US-based company confirmed it will shutter another of its remaining 38 European facilities later in the year. An O-I spokeswoman told FoodProductionDaily.com the decisions were a continuation of its “strategic footprint alignment initiative focused on optimising global assets”.
Second closure imminent
Production at the Finnish plant in Karhula will be transferred to other O-I sites. Closure of the facility was announced after the completion of a consultation process with unions, with an identical procedure currently underway at the second plant earmarked for shutdown, said the spokeswoman.
The company confirmed demand for glass containers had dropped in Europe during the recession but insisted this was not connected to the decision on plant closures.
Rich Crawford, president of O-I Global Glass Operations, said: “Our ongoing global asset utilisation process identified the opportunity to shift production to other European facilities. The result will be lower energy consumption and production costs, while still allowing us to meet current and anticipated market needs."
Drop in demand
In its second quarter results published at the end of July, O-I’s posted a $100m year-on-year drop in profits at $291m– although these were $100m up over the previous three-month period. Glass container shipments in tones fell 12 per cent year-on year “reflecting continued challenging marketing conditions”, said the firm. Debt also jumped $300m over the quarter.
However, the spokeswoman said none of these issues were linked to the European closures, adding they were the results of the “ebb and flow” of the wider economic situation.
“The global economic conditions have impacted our customers, including us,” she added. “We are continuing to focus on proximity to our markets and our customers.”
