Winnipeg Free Press - PRINT EDITION

Winpak lays off 12 people in city

Competition hurts packaging firm

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AFTER skating through the global recession and faltering economic recovery, ringing up record profits in the process, plastic-packaging manufacturer Winpak Ltd. has finally hit a patch of rough ice.

Cut-throat competition from low-cost Asian manufacturers is forcing the Winnipeg-based firm to lay off a dozen workers in its 75-member pouch-making department in Winnipeg.

The layoffs, which are permanent, take effect at the end of August, said the president of Local 830 of the Communications, Energy and Paperworkers Union, which represents roughly 500 unionized workers at the company's two local production plants, in St. James.

However, Charlene Matheson and Winpak president and CEO Bruce Berry said they're hopeful the workers can find jobs in other Winpak departments that have positions to fill.

"Our (overall) business continues to do quite well," Berry said, adding three of the workers have already found jobs elsewhere within the local operations.

The pouch department manufacturers plain, lay-flat plastic pouches used mainly as vacuum packaging for food such as deli meats and cheeses. Winpak is facing increased competition from Asian manufacturers for this less-sophisticated packaging, Matheson said.

"They're flooding the market in the States," Matheson said. "They (Winpak officials) have tried... to be competitive with them over the last five years, but it's getting to the point where they're not making much money anymore."

Where Winpak continues to do well is in the production of more sophisticated printed, zippered, stand-up vacuum-seal pouches. The pouch department will be concentrating on growing that side of the business, Berry said.

He said the company will continue to make the less sophisticated pouches, but the main focus will be on expanding sales of the higher-end products.

"That (higher-end packaging materials) is what we're noted for."

Berry also said the company hasn't decided whether to proceed with an 80,000-square-foot expansion of its main flexible-packaging plant on Saulteaux Crescent.

He said last April that skyrocketing construction costs in Canada could force the company to expand one of its four U.S. production plants instead.

He said construction costs are "significantly" lower south of the border and government incentives are available to help reduce costs.

"As a Winnipegger, I hope we will be able to announce that we are going to go ahead here," he said. "But as of now, it (the expansion) is on hold."

Berry said the company has explained its situation to provincial government officials, but they haven't said if any help is forthcoming.

"They're trying to find ways."

Winpak, founded in 1977, has nine production plants in North America. Its shares (TSX:WPK) closed down 20 cents to $16.05 Monday on the Toronto Stock Exchange.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 10, 2012 B5

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