Tetra Pak will close a packaging factory in Lund, Sweden, due to come into effect in February 2015, axing 250 jobs.
The firm blamed the closure on a fall in carton volumes across Europe which has led to over-capacity in many Tetra Pak factories in Europe.
Domestic demand has declined
Sam Strömerstén, executive VP supply chain operations, Tetra Pak, told FoodProductionDaily it started a consultation process with employees on August 27 regarding the closure.
“Domestic demand in Sweden has declined significantly in recent years and export opportunities are now more sensibly served by other Tetra Pak factories located closer to customers’ facilities,” he said.
“This move is a crucial step in strengthening the company’s regional competitiveness, helping ensure the long-term sustainable growth of our European business.”
Subject to union consultations, the company anticipates the number of workforce reductions to be approximately 250 people – equal to around 6% of the total number of positions in Lund.
“We will begin consultation as soon as possible and give affected employees every support during this very difficult period,” added Strömerstén.
“Subject to the consultations and if the proposal is confirmed, production could end in February 2015.”
Primary growth in China
Most of the customers the company provides for are in Europe, not in Sweden and production is expected to shift to France, Spain, or Italy.
Strömerstén declined to say whether the closure was a knock-on effect of the recession and said as part of the company’s ongoing business it was continually reviewing its strategy and operations.
The firm’s net sales grew by 3.5% in 2013 with sales totalling €11.1bn. Results were driven by processing and packaging systems, and technical services.
“Tetra Pak is growing and growth is primarily coming from China, South East Asia and North and South America. In Europe we see a fall in carton volumes,” he added.
Tetra Pak was established in Lund in 1951 by Ruben Rausing as a subsidiary of Åkerlund & Rausing. The factory currently has one production line, producing Tetra Brik, Tetra Brik Aseptic and Tetra Top.