Huhtamaki has decided to combine the production footprint of its flexible packaging segment in Europe and close its flexible packaging production site in Prague, Czech Republic.
The Finnish consumer packaging company will scale down all the production and supporting activities at the facility during the second half of 2023. The closure of the operations is expected to complete by 31 March 2024.
Huhtamaki said that the production operations will be slowly shifted to its other production sites.
The move will impact all 198 workers at the location. During this period, Huhtamaki will assist its staff members, especially by informing them of job openings at other Huhtamaki locations in the Czech Republic and around Europe.
Currently, Huhtamaki operates two factories in the Czech Republic. The fibre packaging operation in Okrisky, which currently employs 274 people, is unaffected by the shutdown of the Prague factory.
The Flexible Packaging Prague facility does not contribute significantly to Huhtamaki’s sales or earnings.
Huhtamaki said it will record closure-related expenditures of about €35m in the second quarter of 2023.
The expenses, most of which are non-cash, will be recorded as items affecting comparability.
Additionally, the closure is anticipated to be cash positive and boost the firm’s competitiveness in Europe over time.
In April this year, Huhtamaki unveiled its plans to introduce three new sustainable solutions in mono-material flexible packaging.
The firm announced that the solutions are recyclable and are expected to use fewer materials than conventional complex and multi-layered materials.