BUSINESS

Intertape Polymer to downsize N.S. plant, close Kentucky plant, shift production

06/26/2012 08:39 EDT | Updated 08/26/2012 05:12 EDT
MONTREAL - Intertape Polymer Group Inc. (TSX:ITP) will shift some work currently done at its plant in Truro, N.S., to a factory in Utah as part of a North American reorganization brought on by competitive pressures and volatile costs.

No layoffs are expected at the Nova Scotia plant because it will continue to make some products for the Montreal-based company, which manufactures plastic wrapping, tapes and other products for packaging.

"At Truro, they're basically not expecting to have any layoffs," a company spokesman said Tuesday.

"They're expecting to absorb most, if not all, of the employees by shifting them over to woven products."

About 27 employees who make shrink wrap products at the Truro plant, about 10 per cent of the Nova Scotia plant's workforce, will be transferred to its woven products line, the spokesman said.

At Intertape's Kentucky plant, about 50 people will lose their jobs, he said.

Production at the Richmond, Ky., will be transferred to Carbondale, Ill.

"Considering competitive pressures, market conditions and the volatility of input costs, we are continuously reviewing and analyzing all aspects of our operations," president and CEO Greg Yull said in a statement.

"The process will be seamless to customers and we do not anticipate any significant impact on our revenues," Yull said.

The shrink film business in Truro will be transferred to Tremonton, Utah, which will create one facility in North America for this business, Intertape said.

Intertape expects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of more than US$5 million in 2013 and about US$6 million in subsequent years.

Intertape employs 1,800 people at 19 locations, including 12 manufacturing plants in North America and one in Europe.

The company said it will take a charge of between $14 million and $16 million in the second quarter to reflect some of the costs of the reorganization plan, including severance pay and other costs.

Intertape Polymer Group Inc. makes a variety of paper and film based pressure-sensitive and water-activated tapes, specialized polyolefin films, woven fabrics and complementary packaging systems for industrial use and retail applications.

The company is headquartered in both Quebec and Florida.

Shares in Intertape Polymer were down seven cents at $7.69 in noon trading Tuesday on the Toronto Stock Exchange.