Portola Packaging announces $12 million capital expenditure investment in closure business

NAPERVILLE, Ill., Feb. 11, 2013 /PRNewswire/ -- Portola Packaging, Inc. is announcing a $12 million capital expenditure in its Kingsport, Tenn. and Tolleson, Ariz. facilities. The investment is being made to accommodate growing market demand for its hot-fill and aseptic beverage closures and increased dairy business market share.

Some of the new capital improvements are already under way, with completion expected by the end of the third quarter. New investments are being made in additional high-speed compression and injection molding equipment as well as in existing production line upgrades.  The company projects that approximately 30 production employees will be added to those locations when the increased capacity is operational.

This investment comes on the heels of a previous substantial expenditure—also in high-speed compression and injection molding capacity—made over the past three years.

In line with Portola's ongoing objective to create more efficient, cost-effective facilities and improve the environmental footprint, there also will be infrastructure replacements and upgrades.  These will include process water capacity, hvac/dehumidification, electric power service and distribution, resin delivery, etc. 

Over the past three years, Portola has grown its beverage closure volume by double-digit percentages annually.  Manufacturing and quality initiatives, coupled with new stock and custom closures for tamper evident, aseptic and extended shelf-life applications are responsible for part of the growth—particularly in the juice, dairy and specialty beverage market segments.

"Our focus on lean manufacturing, reliability-centered maintenance, and product rationalization has allowed us to increase unit throughput per employee by 43 percent over the past four years.  After the additional capacity is fully operational, we expect to exceed a 75% improvement for the same metric," said Kevin Kwilinski, president and chief executive officer, Portola. 

As a result of the decision to expand capacity at the Kingsport and Tolleson facilities, Portola will begin tapering off production at its Batavia, Ill. plant in the middle of April. The facility is expected to be completely shut down no later than August. Geographic location of expected growth opportunities and the level of investment which would have been needed to upgrade this facility were factored into the decision. Affected are 76 employees.

"Our Batavia facility has been producing closures for Portola for the past 20 years.  After extensive analysis and careful thought, we came to the conclusion that closing this facility and upgrading production at our other two plants was the best decision for our customers and company.  We want to thank our loyal Batavia production workers for their years of service and will be assisting them via outplacement services so they can transition to their next place of employment," Kwilinski said.

The Batavia facility also housed 15 corporate employees (engineering, quality, research and development).  That staff will join the rest of the corporate employees in a new, larger corporate headquarters facility in the Naperville, Ill. area. 

"Our new and improved U.S. manufacturing footprint will effectively enable us to service our existing customer base while providing a footprint for growth over the coming years.  Our Kingsport facility is located in the Northeast corner of Tennessee and is in close proximity to major Northeast, Southeast and Southern shipping lanes as well as a reasonable distance to the Midwest.  Our Tolleson location is located in the Phoenix metro area and will primarily serve the Southwest, Northwest and Central U.S. states," Kwilinski concluded. 

Going forward, Portola Packaging will operate nine manufacturing facilities around the world: two in the United States, three in Canada and one each in Mexico, the United Kingdom, Czech Republic and Russia.

About Portola Packaging
Portola Packaging, Inc. is a leading manufacturer of stock and custom tamper-evident plastic closures and containers for dairy, juice and other food segments.  The company is known for its superior product integrity, technical capability, global manufacturing footprint and speed-to-market.   For more info: www.portpack.com.

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SOURCE Portola Packaging, Inc