About three-quarters of Shorewood Packaging’s 200 employees are on a forced weeklong vacation, but despite speeding rumors, there are no imminent plans for permanent closure.

“The plant isn’t closing, we didn’t lose any chunk of business,” plant manager Michael Fenton said Wednesday. “The sky’s not falling.”

A paper and packaging company, the Danville Shorewood plant on Cane Creek Boulevard produces cigarette cartons for major tobacco distributors including Philip Morris.

Fenton said the company decided to put a hiatus on production because its customers have large unsold inventories they need to reduce before purchasing more from Shorewood.

Normally a 24-hour-a-day, seven-day-a-week operation, the plant will close this week and use the time for maintenance and repairs, Fenton said. When the plant reopens May 7, it will only operate six days a week for fewer hours a day while customers determine their needs.

“It’s a tough market out there and it’s getting more competitive,” Fenton said.
A generally weak economy has caused decreased sales in almost every sector, probably contributing to undersold inventories, he added.

An article that ran Tuesday in Converting Magazine reported that Shorewood Packaging was expanding into the Latin American market and opening a production facility in Aguascalientes, Mexico.

Fears about jobs permanently moving south of the border seem likely.
Fenton said the temporary halt and the new facility are not related.
“The expansion is to service the customer base in Mexico,” he said, adding the Danville plant wants to continue to be part of the North American hub for tobacco manufacturing.

“That strategy hasn’t changed.”

The new plant “hasn’t impacted us at all,” Fenton said.
In 15 years of operation, this isn’t the first time Shorewood has closed its doors under similar circumstances.

“I’d say we’ve done it two or three times over the years and business ebbs and flows,” said Fenton, who sounded confident that business would be up and running again.
“Our customers are still happy, we haven’t lost any business,” he said. “If there is a decline (in demand), we will deal with that.”

- Contact Sarah Arkin at sarkin@registerbee.com or (434) 791-7983.