Disposable packaging manufacturer Huhtamaki will close down its manufacturing unit in New Lynn, New Zealand, transferring production to its other flexible packaging units in Asia.
New Lynn is the New Zealand bade for its flexible food packaging business unit.
The Finnish company said the unit is currently operating at a loss and the decision to close will optimises its flexible packaging manufacturing footprint, in a statement released to OYJ stock exchange.
Huhtamaki will continue to serve its customers in Oceania from sales offices in Auckland, New Zealand and Melbourne, Australia.
The company will transfer its manufacturing to its other flexible packaging units mainly in India, Thailand and Vietnam.
The closure of the New Lynn unit is expected to be finalised by the end of July 2012 and will affect approximately 135 employees.
The closure of the New Lynn unit and the transfer of volumes to Asian units will have an estimated EUR 5 million annualized positive impact on the Flexible Packaging segment’s EBIT as of H2 2012.
The company said it would take an approximately EUR 8 million one-time charge in the third quarter 2011 to close the unit.
Huhtamaki currently has three manufacturing units in the Auckland area in New Zealand.
The company said the closure of the New Lynn unit does not affect the Foodservice operations in Henderson or the Molded Fiber operations in Otahuhu.
It will continue to have approximately 320 employees in New Zealand after the closure of the New Lynn unit.
Image courtesy of huhtamaki.com