Portola Packaging will shut down its Portola Tech International cosmetics closure and container manufacturing unit to focus on its beverage closure and bottle business.
Portola Packaging Chief Financial Officer Glenn Fish told PlasticsToday the cosmetics closure and container unit represented less than 10% of sales for the company.
"When we looked at our cosmetics packaging unit it hasn't provided sufficient return on capital," he said. "We don't have a competitive advantage with cosmetics like we do with the main portion of our business."
Production at Portola Tech's Cumberland, RI and Nanhai, China manufacturing locations is expected to cease by the end of August. The business assets, manufacturing equipment, molds, etc., are expected to be liquidated by the end of the year.
Fish said the company believes that more opportunities lie ahead for the non-carbonated beverage sector.
"We are clearly focused on areas where we have competitive advantage and strength," he said. "We have a proprietary manufacturing process and methods that really provide us with a competitive advantage in producing closures and bottles for non-carbonated beverage applications."
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.
Going forward, Portola Packaging will operate 10 manufacturing facilities around the world: three in the U.S., three in Canada and one each in Mexico, the United Kingdom, New Zealand and the Czech Republic.
Portola acquired the former Tech Industries (Woonsocket, RI) in September 2003, as part of its broader effort to target growth segments, which it identified at the time in food, personal care, and cosmetics. In January 2004, when Tech Industries changed its name to Portola Tech International, its parent, Portola Packaging, said some of its manufacturing sites would add capacity to fabricate closures and containers for PTI.
In 2008, Portola Packaging announced that it had reached an agreement with creditors to enter a "pre-packaged" Chapter 11 bankruptcy filing.