CLOSING DOWN
Packager to Close Garden Grove Plant
By SHERRI CRUZ
Marietta, Ga.-based Graphic Packaging Corp. will cut 124 workers in the closing of its Garden Grove plant in the next three months.
The company’s 152,000-square-foot plant in Garden Grove makes folding containers for the food and consumer markets, such as cereal and pizza boxes. It also produces microwavable sleeves for foods such as Nestl & #233; SA’s Hot Pockets.
The work will be shifted to Graphic Packaging’s plants in Portland, Ore., or Golden, Colo., said company spokesman Bruce Kirk. Employees, told about the closing in January, will be offered severance and help finding new jobs.
Kirk said the packaging industry is consolidating and looking for ways to cut costs.
“We didn’t have the business in the area to support that plant,” he said. Most of the packaging made in Garden Grove was shipped out of the state.
The company is looking to cut costs amid weakness at some of its customers.
“It’s a pretty tough time to raise prices,” Kirk said. One of the company’s largest customers, Kraft Foods Inc., recently announced it would close 20 plants across the U.S., including its Buena Park Nabisco plant.
The closing of the Garden Grove plant is expected to save Graphic Packaging about $4 million a year.
Last year Riverwood Holding Inc. bought Golden, Colo.-based Graphic Packaging International Corp. in a $3.2 billion stock deal. The company, which was renamed Graphic Packaging, has 8,300 workers worldwide.
Following the acquisition, the company said it planned to cut $17.6 million in the first 12 months of operation.
Company sales in 2003 grew 35% to $1.7 billion, versus a year earlier, thanks largely to the acquisition of the paperboard packaging business. Graphic Packaging’s operating profit fell 25% to $106 million. Operating profit fell 34% to $18.8 million in the fourth quarter.
The company is in the process of selling its Garden Grove plant, Kirk said.
Graphic Packaging competes with companies such as Chicago-based Smurfit-Stone Container Corp. and Chicago-based Field Container Co., which also have been consolidating, Kirk said.
Riverwood made mostly beverage containers used to hold packs of soda or beer; Graphic Packaging made folding cartons for the consumer market. Following the merger, the company closed a beverage-carrier making plant in Wisconsin in November.
The company recently settled a lawsuit it filed against Stamford, Conn.-based MeadWestvaco Corp. on a patented 12-pack beverage holder used by Coca-Cola Enterprises Inc.
Under terms of the agreement, both companies have the right to sell the carton under a cross-licensing agreement.
Fullerton Day Runner Operation Shuttered
By SHERRI CRUZ
MeadWestvaco Corp. has shut down its Fullerton-based Day Runner Inc. operation just months after buying the company.
Day Runner’s Orange County headquarters and distribution center employed 132 workers.
Day Runner, which made paper and electronic calendar organizers, will be folded into the company’s Sidney, N.Y., distribution center, said Donna Cox, a spokeswoman for Stamford, Conn.-based MeadWestvaco.
A few people have transferred to New York.
The company announced the closure to its employees in January. Employees received outplacement services and severance.
Day Runner is part of MeadWestvaco’s Dayton, Ohio-based consumer and office products unit, one of MeadWestvaco’s business units, which also include packaging, chemical and timber operations.
MeadWestvaco acquired Day Runner Inc. from Los Angeles-based Kaysun Holdings LLC in October for $43 million.
At the time, MeadWestvaco was uncertain whether it would fold the business into current operations or run it separately. Kaysun, a partnership between Kayne Anderson Capital Advisors and Sunrise Capital Partners, had taken Day Runner private in a 2001 buy.
The move comes amid tough conditions for paper products companies. Late last year, MeadWestvaco announced it planned to close factories and trim 1,000 jobs in a bid to boost profit and efficiency.
MeadWestvaco said it had overlapping operations as a result of Westvaco’s buy of Mead in 2002.
The company posted a loss from continuing operations of $2 million last year on sales of $7.6 billion, up 4% versus a year earlier.
And last week, MeadWestvaco warned its first-quarter loss would be worse than Wall Street forecasts because of rising wood costs and a sluggish market for some of its paper and paperboard products.
Chicago-based competitor Smurfit-Stone Container Corp. also warned in March that higher paper costs would hurt its first-quarter earnings results.
MeadWestvaco has a goal of adding $250 million in earnings by the end of 2005 by cutting costs, improving product mix and boosting sales, according to the company’s annual report.
Day Runner was founded in West Hollywood in 1980 as Harper House, the name of the street where the company began. Kaysun bought Day Runner in 2001.
MeadWestvaco’s notebook, paper and calendar brands include At-a-Glance, Cambridge, Columbian, Five-Star and Mead.
The company employs 29,500 workers worldwide.
