Plastic closure maker Portola Packaging recently announced a $12 million capital expenditure in its Kingsport, TN and Tolleson, AZ facilities. The company said the investment is being made to accommodate growing market demand for its hot-fill and aseptic beverage closures and increased dairy business market share.
Glenn Fish, chief financial officer for Portola, told PlasticsToday this most recent expenditure builds on top of an overall larger capital investment the company has embarked on for the past three years, which has helped Portola grow its beverage closure volume by double-digit percentages annually.
The company said that 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.
"We have eliminated less efficient assets and concentrated on the production of high-speed compression," Fish said. "At the speeds at which we are running, we can produce multiple closures with a smaller footprint."
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.
In addition, there also will be infrastructure replacements and upgrades at the company's TN and AZ facilities. The company projects that approximately 30 production employees will be added to those locations when the increased capacity is operational. Upgrades include process water capacity, hvac/dehumidification, electric power service and distribution and resin delivery.
Back in May, Portola announced the company's North American facilities had reduced energy by almost 20%. The company credited the energy reduction to the replacement of poor efficiency equipment.
Roy Robinson, VP strategic marketing for Portola, told PlasticsToday in May that the company continues to invest in new compression molding equipment such as twist-on/twist-off tamper-evident (TE) closures.
"This newer style of TE closure is preferred by consumers because it adds functionality," he said. "The closure can easily be screwed back onto the bottle and spills can be averted. This is not the case with injection molded TE snap caps."
GreenLyte plug-seal closure line
In December, Portola launched GreenLyte, a new line of plug-seal, high-density polyethylene (HDPE) 38 mm closures for single and multiserve, hot-fill and aseptic beverage packaging applications.
GreenLyte one-piece closures represent an alternative to traditional two-piece (closure plus liner) polypropylene (PP) types typically used for juices, ready-to-drink teas, isotonics, enhanced waters, low-acid nutraceuticals, and high-end, aseptic-filled beverage products.
The company says the one-piece plug design can reduce costs for brand owners due to shell lightweighting, liner elimination and material choice.
"We know that PP can be more costly and volatile so by switching customer supply to HDPE, we are helping to reduce cost, while also providing a solution that offers equal or can exceed performance attributes offered by traditional two-piece closures," Fish said. "This has attracted the eyes of many and we are growing in this area."
Unlike two-piece closures, which usually require that the TPE liner be steamed in order to achieve proper application, this step is not necessary with Portola's linerless GreenLyte line. Additionally, the seal design and low coefficient of friction facilitates application for a wide range of capper settings.
Closure of Batavia, IL plant
Portola will begin tapering off production at its Batavia, IL plant in the middle of April, with an estimated shut down date sometime in August. Fish said the machines operating at that facility will be relocated to the company's other plants.
Geographic location of expected growth opportunities and the level of investment that would have been needed to upgrade this facility were factored into the decision to close the plant.
The Batavia facility has produced closures for Portola for the past 20 years. About 76 employees are affected by this closure. The Batavia facility also housed 15 corporate employees in engineering, quality, research and development and that staff will join the rest of the corporate employees at the company's headquarters in the Naperville, IL area.
Going forward, Portola Packaging will now 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.
Due to a focus on lean manufacturing, reliability-centered maintenance, and product rationalization, Portola said that the company has increased unit throughput per employee by 43% over the past four years.
After the additional capacity is fully operational, Portola expects to exceed a 75% improvement for the same metric.
"We're managing business to make sure we are able to offer the best products to our customers at a competitive price," Fish said. "The $12 million investment is allowing us to accommodate to the growing market and customer demand."