Irish financier Paul Coulson's Ardagh Group revealed on Thursday that it plans to close a second US glass-container plant in a little over a years, signalling that this area of the business remains under pressure.
The New York-listed company said that it has decided to permanently cease production at its Lincoln, Illinois, facility, which employs about 150 people, around April 30th.
“This footprint adjustment, combined with our ongoing focus on cost reduction, aims to further enhance our competitiveness, as well as our optimising the effectiveness of our capital investments,” the company said.
“Ardagh continues to pursue improvements in flexibility, quality and service to further strengthen our position in the US glass market”.
Ardagh, which floated on the stock market almost two years ago, closed a beer-bottle manufacturing plant in Milford, Massachusetts, last March, with a loss of about 250 jobs, and cut production in half at a plant in Louisiana, resulting in further layoffs, as it grappled with weak demand in the market.
Shares in the company fell as much as 1.2 per cent on Thursday morning in New York but had managed to rally by midday, when they were up 0.8 per cent. The company’s value has fallen by almost 38 per cent over the past 12 months to $2.78 billion (€2.24 billion).
Ardagh, in which Mr Coulson effectively owns a 33 per cent stake, downgraded its full-year 2018 earnings forecast twice in the second half of last year, amid problems in its US glass division, currency fluctuations, and a weak European food harvest that affected its metal packaging unit on this side of the Atlantic.
Latest projection
The company’s latest projection is that its earnings before interest, tax, depreciation and amortisation (ebitda) would be between $1.45 billion and $1.475 billion.
Mr Coulson has transformed the company, which traces its roots to when the Irish Glass Bottle Company started production in Dublin in 1932, through a series of acquisitions over the past two decades into one of the world's largest glass and metal container groups. The group operates more than 100 facilities in 22 countries, employing about 23,000 people. Its annual global sales are currently about $8.6 billion.
Ardagh is due to report full-year results on February 21st.
Meanwhile, sector followers were also digesting a mixed set of results on Thursday from Colorado-based glass jars and metal containers group Ball Corp. While the company's fourth-quarter sales beat analysts' expectations, earnings per share fell short of the consensus forecasts.
