Facility consolidation program reaping benefits – Bemis

By Joseph James Whitworth

- Last updated on GMT

Related tags Net sales Marketing

Bemis reaps rewards of consolidation program
Bemis reaps rewards of consolidation program
Bemis is expecting to deliver total program costs savings of $45m this year after announcing its consolidation program is almost complete.

Eight of the nine planned closures have now taken place with the last one expected to shut in the second quarter this year.

The firm recorded $9.3m in costs to the three months ending 31 March 2013 in its Q1 results relating to the actions compared to $8.3m in 2012.

Segment overviews

For the first quarter of 2013, US Packaging net sales of $746m represented a decrease of 2.5% compared to the same period of 2012. 

The company reported volume declines in over-wrap for beverage applications, but higher unit sales in packaging for meat and cheese, as well as dairy and liquid products.

US Packaging segment operating profit for Q1 2013 was $86m, or 11.5% of net sales, compared to $82m in 2012. 

Lower net sales in 2013 reflect lower unit sales volumes of packaging for certain non-barrier packaging, partially offset by increased unit sales volumes for products such as refrigerated foods where barrier technology is a requirement. 

Cooler weather in many parts of the US in the Spring has delayed the start of the normally strong season for certain grocery products, said the firm.  

Global Packaging

For the first quarter of 2013, Global Packaging net sales of $368.5m represented a decrease of 6.6% compared to Q1 2012. 

Acquisitions increased net sales by less than 1%, while currency translation decreased net sales by 6.5% and operating profit for the first quarter remained the same at $25.9m.

The firm said the impact of lower unit volumes in Latin American operations was completely offset by increases in our selling prices.

Three low margin facilities in the global packaging business segment were closed during 2012 as part of the facility consolidation program. 

Pressure Sensitive Materials

Pressure Sensitive Materials net sales were $140.5m for the first quarter, a 3.3% decrease from the same period in 2012. 

First quarter operating profit was $7.7m, or 5.5% of net sales, compared to $9.7m for the first quarter of 2012. 

Higher unit sales volumes of label products substantially offset lower unit volumes for both graphic and technical products, resulting in a less favorable sales mix and lower operating profit margins. 

When asked about the European business in a conference call discussing the firm’s results, Henry Theisen, Bemis president and CEO added they will focus more on niche products in niche markets.

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