CCL Industries to move U.S. manufacturing to Mexico in $35M project
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CCL Industries Inc. announced it will spend $35 million to expand its Guanajuato, Mexico operations over the next three years while closing its Avery segment manufacturing and distribution center in Meridian, Miss.
The Toronto-based specialty label and packaging company, which has corporate offices in Framingham and includes CCL Label and Container segments in addition to Avery, plans to construct a new design plant to service major global automotive and tier 1 customers in Mexico. That project was announced earlier this year and will begin this quarter, according to a statement.
Meanwhile, on an adjacent parcel, CCL said it will build a low-cost binder manufacturing plant that will export its entire output to the United States and Canada.
CCL said it will transition Avery manufacturing and distribution operations from Mississippi to an existing facility in Tijuana by mid-2016. Output will begin in late 2016 and the Mexican plants will be fully operational by 2018.
CEO: U.S. manufacturing ‘unaffordable’
“Once the expansion completes, Mexico will become our second largest country in the world after the United States in terms of infrastructure and employees. The decision affecting Meridian is very regrettable but offshore competition has made the consumer price point for binders unaffordable with domestic manufacturing, especially for retail channels in the United States and Canada,” said Geoffrey T. Martin, president and CEO of CCL.
Martin added that the company will “act responsibly to help employees and the local community adjust,” and offer transfer opportunities for employees to both Avery and CCL locations in the U.S.
CCL Industries employs about 11,100 people and runs 105 production facilities in 29 counties.
Dallas distribution planned
At the same time as the Mexican expansion, CCL will open a state-of-the-art U.S. distribution center in Dallas, which the company said will significantly improve logistics to service key customers. CCL will report a $5 million restructuring charge in the third quarter related to the project.
The company expects to save $8 million annually beginning in 2018 as a result of the Mexican and Dallas moves.
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