Films extruder Polipropileno de Galicia (Poligal) is to shut down its loss-making main plant in Spain in a major restructuring move it blamed on “unsustainable” market conditions.
Poligal, which also has film production in Portugal and Poland, is closing the facility at Narón in Galicia, north western Spain with the loss of over 100 jobs.
It said this action was essential due to “serious structural problems” at the operation after its margin was hit by continually rising raw material prices and market overcapacity.
The industrial reorganisation is being carried out to improve the Barcelona-based company's competitiveness and consolidate its future plans. Customers of the Narón unit will be served in future by its other plants, according to Poligal.
The polypropylene film specialist, part of diversified family-run Catalan company Grup Peralada, last week informed creditors at the Mercantile Court in Barcelona that it would liquidate its Narón facility. Poligal stressed the plant is insolvent and cannot meet its financial obligations.
Since 2012, the operation has accumulated debts amounting to almost €11m, with the sum over the past two years alone exceeding €5.5m, reported regional paper La Voz de Galicia. An insolvency administrator has been appointed to oversee the future of the plant and its former workforce.
After being informed of the shutdown, workers at the Spanish plant were sent home on paid leave. Poligal said it deeply regretted the decision it was forced to take and understood the impact the closure will have on staff, their families and the area. It thanked the Narón workers for their years of commitment.
Workers, many of whom have worked for Poligal since the Spanish plant opened in 1991, were shocked and angered last week by the sudden closure. Many attended protest demonstrations and have mounted a sit-in at the plant.
Some are reported to have claimed Poligal invested heavily at its plant in Arcos de Valdevez, Portugal and in a big new €30m 40,000tpa BOPP film plant it launched in Skarbimirez, western Poland in 2017 while neglecting the Narón operation.
Poligal's Spanish unit operates two 6m wide Brückner BOPP extrusion lines with a 20,000tpa capacity, three metallisation lines and a number of cutting lines.