Aluminium giant Alcoa, owner of the Reynolds packaging brand, announced Thursday it would close its plastics manufacturing plant in Kentucky, United States by mid-year, as it reshapes its downstream operations.

Alcoa said the restructuring announced a year ago was to improve returns on its investments.

Analysts in February, amid market speculation that two Australian firms were to bid for the American company, had identified Alcoa's downstream operations as a possible turnoff to takeover candidates.

The Reynolds Food Packaging plant closing will cut 115 jobs.

Current customers

"The decision to close the plant will not impact Reynolds' position in the marketplace nor will it affect our ability to serve current customers with the complete line of DelPak and other Food Packaging products," said Bill Coad, President of Reynolds Food Packaging, in a release announcing the move.

The Kentucky plant produces thermoformed and injection moulded plastic trays and containers, primarily used in the bakery, deli and food service market segments.

Future growth

"The decision to close this plant was very difficult," said Ray Newton, Reynolds Food Packaging Director of Thermoforming Operations. "Despite the outstanding efforts of our workforce, the costs and demands of the market simply cannot support this facility. This action will better position Reynolds Food Packaging in the marketplace and allow for future growth."

Production will continue through April until certain lines are transferred to other packaging facilities, the company said, noting that a transition plan was being developed.

business@gleanerjm.com