(Montreal) TC Transcontinental has closed its recycling plant in Montreal, three years after acquiring it. The printer and packager plans to tighten its belt at a time when demand is under pressure.
As part of the closure, 31 employees lost their jobs and another was relocated within the company, said vice-president of communications, François Taschereau.
“As part of our objectives of optimizing our assets and accelerating the commercialization of sustainable products, we have decided to integrate our soft plastics recycling activities directly into our film production plants,” explains T. -he.
The Montreal company had acquired the assets of Enviroplast, a flexible plastic recycling company in Anjou, for an amount of 2.4 million. The factory, which had suspended its activities due to bankruptcy, was able to restart under the control of Transcontinental.
The company did not want to disclose the sums invested after the acquisition in its recycling plant, but the company mentioned the figure of “several millions” in November 2021, as part of an interview with The Press.
Transcontinental plans to undertake an “ambitious” cost reduction program in order to find between 20 million and 40 million in recurring savings over two years. It also hopes to make 100 million from the sale of assets.
“We all agree that we must do better to generate greater profitability,” said President and CEO Thomas Morin during a conference call on Wednesday to discuss more recent results. quarterly. We need to get better returns on what we already have. »
In addition to closing the Montreal plant, the company also announced that it will close a packaging plant in Wisconsin in February.
She also sold a building located in Quebec for an amount of 12 million. The building housed a factory used to print the daily newspapers of the National Independent Information Cooperative (CN2i), which includes the daily “Le Soleil”.
The factory’s activities ceased in 2020 after the media cooperative’s decision to stop printing its weekday dailies. “It has since been used for our distribution activities, which will cease by May 2024 with the end of Publisac,” explains Mr. Taschereau.
In November, Transcontinental announced that the Publisac will be replaced across Quebec by a “folded in four” advertising leaflet which will be distributed by Canada Post. The news created concern in the local newspaper industry, which lost its means of distribution.
Transcontinental faces a series of headwinds as the rising cost of living weighs on demand in the packaging segment and the printing sector experiences a structural decline.
Results above expectations
Despite the difficult context, Transcontinental published results better than analysts’ forecasts for its fourth quarter ended October 31, thanks to profit margins higher than expectations.
The company posted a net profit of 41.7 million, which represents a decrease of 18.7 million compared to last year. Adjusted diluted earnings per share were 83 cents. Revenues, for their part, declined by 2.8% to 779.7 million.
Before the results were released, analysts expected earnings per share of 64 cents and revenue of 788.5 million, according to financial data firm Refinitiv.
Transcontinental shares gained 38 cents, or 3.37%, to $11.64 in the morning on the Toronto Stock Exchange.