TRURO - Cheaper electricity rates in the United States is part of the reason behind a transfer of work from Intertape Polymer in Truro to the United States.
"Your part of the world apparently is one of the most expensive areas to operate in, OK. So yeah, it's one of the factors," spokesman Rick Leckner said from Montreal where the company is based.
"In order for the company to remain sustainable they have to make certain changes because they want to keep that plant there. But it is a very expensive area to operate in, to a degree, because of the power rates."
The company announced Tuesday it is moving the Truro plant's shrink film production to another company facility in Tremonton, Utah, as part of a North American reorganization to help centralize specific operations.
Including management, about 325 people are employed at the plant, of which 27 workers are in the shrink film department. Most of those affected will be hourly workers and Leckner said all efforts possible will be made to absorb those workers into the woven sectors of the plant during the transition period over the next six to eight months.
Layoffs, if any, he said, will be restricted to a "handful'.
And while the company is committed to maintaining the woven portion of the Truro facility, which makes up the majority of its manufacturing process, Leckner said the reality is the company also has to find savings where it can in order to ensure its long-term future.
"You've got to look at the big picture," Leckner said. "The big picture is that we are in a very difficult economic situation and anybody who doesn't realize that has got rose-coloured glasses on. So companies today need to do what has to be done to maintain productivity and efficiency and profitability. Because, if there are no profits, then there are no jobs. And Intertape Polymer is a publicly traded company, so there is an added element in that they have to answer to shareholders."
The company said in its announcement that gross savings by the overall moves it is making, including adjustments in the U.S., are expected to be more than $5 million in 2013 and about $6 million in each subsequent year.
Part of the company's restructuring will see a plant in Kentucky closed and that production shifted to Illinois, resulting in the loss of 55 jobs.
In response to electricity costs, Toby Koffman, a spokesman with the province's Department of Economic Rural Development and Tourism, said the government is aware that such issues exist.
"Certainly we appreciate that electricity rates, you know, are a concern for companies. But that is why the province is moving towards renewable forms of energy," he said.
"We believe, and there is good evidence for this, that having a broader portfolio of energy sources, including local renewables, cleaner-burning natural gas and so on, would enhance our energy security and help stabilize energy rates over time for businesses as well as Nova Scotia families."