Milford Hopes Ownership Change Will Boost A Top Employer
PHOTO/EMILY MICUCCI
The Milford site of Verallia North America is one of 13 to be purchased by Luxembourg-based Ardagh Group. The company's deal with Verallia's owner, Saint-Gobain, is pending regulatory review.
Luxembourg-based Ardagh Group's recent move to acquire Verallia North America, the Indiana-based glass packaging division owned by French multinational Saint-Gobain, is just the latest in a string of recent purchases the packaging company has made to increase its global reach.
But locally, Verallia's Milford plant has had an important history as a manufacturing employer in town — one local officials hope to keep.
”I know a lot of people who have worked there and who work there now,” said Dino B. DeBartolomeis, a Milford selectman. “It's a good job, and we need to make sure that … plant continues to be in Milford.”
Although officials from Ardagh, Saint-Gobain and Verallia declined comment since they agreed to the $1.7-billion sale in February, there is some indication that DeBartolomeis can rest easy that the company will maintain its Milford presence, which includes 225 employees.
An ‘Excellent Opportunity’
When negotiations began in January, Ardagh CEO Niall Wall said in a statement that a Verallia purchase would allow the company to break into the U.S. wine sector.
”It represents an excellent opportunity to provide our U.S. customers with enhanced competitiveness and improved levels of service through the achievement of greater operational efficiencies,” Wall said.
For Saint-Gobain, the decision to sell its Verallia division was a pragmatic one. Upon receiving Ardagh's offer to purchase the division, Saint-Gobain CEO Pierre-Andre de Chalendar said in a statement that the deal would allow his company to refocus on the construction sector and strengthen the group's top line.
After the sale was finalized, Chalendar said in an earnings call that it was a “very good financial deal” for the company.
”We did this very well, just at the right moment with Verallia, bringing in all-time high results” in the U.S., Chalendar said.
An ownership change is nothing new for the glass-bottle maker, which operates 13 U.S. plants. The company was founded in 1842 as Foster-Forbes Glass Co., and changed hands twice
The Milford plant opened in 1973, when the company was still owned by Foster-Forbes. Saint-Gobain didn't enter the picture until 1995, when it formed a joint venture with the Ball-Foster Glass Container Co.
Another change in ownership might not be significant, Milford Town Planner Larry L. Dunkin said.
William D. Buckley, a Milford selectman who works in consulting, agreed. He saidArdagh is making a major investment, and that the Milford plant could actually expand under the deal.
“Companies don't come in and spend ($1.7 billion) in the hopes they shut down facilities,” Buckley said.
Verallia's payroll isn't enormous compared with those of large local employers like Milford Regional Medical Center and Waters Corp., Buckley said. But it's significant enough that the town negotiated a 20-year tax increment finance (TIF) agreement with Verallia in 2009 to preserve jobs and keep the site competitive.
Verallia spent $35 million on new equipment and furnace upgrades under the agreement, which Buckley said likely makes the property more attractive to its new owners. Jack Healy, director of operations at the Massachusetts Manufacturing Extension Partnership (MassMEP) in Worcester, said the fact that Ardagh Group is already in the packaging business bodes well for Verallia's future.
”They're buying for location as much as anything else,” Healy said.
If there's any reason to be concerned about the future of Verallia, said Healy, it's the fact that plastic bottles have become the container of choice for many packaging customers. But Healy added there will always be some need for glass packaging.
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