The MCC Cwmbran site was originally set up by Spear Europe before industry consolidation saw it become part of Constantia Flexibles, and then MCC.
One label industry expert described Cwmbran as “the largest label producing site in the UK and also the best MCC site in the UK. It’s not just another label business.”
In a statement US-headquartered MCC told Printweek the closure plans were part of a “business streamlining” designed to improve overall efficiency in MCC’s EMEA operations network.
“There is no immediate change for our staff or to MCC Cwmbran customers. This proposal is subject to review and discussion through a collective consultation process, as required by law. This process is expected to take several months and no decisions will be made until the end of that process,” the group said.
“Our MCC business remains vibrant and strong. The proposal to close Cwmbran is intended to rebalance UK production based on current demands and capacity across our UK plant network.
“Our highest priority is to our customers and our MCC teammates. We are working closely with all Cwmbran customers and teammates to discuss all options, which potentially may eventually include production transfers and some job redundancies. We are committed to ensuring an outcome that minimises impacts on all our stakeholders in Cwmbran.”
Unite regional officer Richard Jackson reacted with dismay to the news, and said: “It is highly disappointing that a financially viable factory is being closed and jobs moved overseas.
“Unite will do everything it can to oppose this closure and help our members through this difficult time.”
MCC has not confirmed the current number of employees at the site, but it is understood to be around 200.
Cwmbran runs conventional and digital label printing kit and is home to a Cerutti 960/2 wide web gravure label press, Gallus Labelfire, and two HP Indigo digital label presses among other equipment.
The closure is not believed to be Brexit-related, with MCC directors previously stating that following the Brexit vote “the company has adapted well to the new rules to the extent that it has not proved detrimental to our business.”
In its most recent accounts, for calendar year 2023, Multi-Color Cwmbran Ltd posted a 21% slump in sales to €59.4m (£49.7m), and an operating loss of €895k compared to an operating profit of €2.5m the prior year.
Most of the firm’s output of pressure sensitive labels for the beverage market was bound for Europe at that time, although European sales of €34.7m were also down by more than €13.5m year-on-year.
Label industry adviser and consultant Will Parker told Printweek: “In beverage during 2024 we saw a significant shift in the alcohol consumption in the EU and UK. Sales not only dropped significantly due to habits changing but also they shifted, notably in December where we saw non-alcoholic drinks really challenging and in some sectors overtaking traditional alcohol sales.
“If you then add in the rising costs in the UK employment around National Insurance and compound that with the expected Employment Rights bill impact it really does start to make it harder to support a business case where the returns are diminishing vs manufacturing in other countries where the platform will generate a greater return.”
He added: “Labels has always been an excellent innovator and an agile industry but that does not make it immune to pain.”
Last September $3bn (£2.4bn) turnover MCC announced the launch of $950m in senior secured loan notes.
It plans to use the net proceeds from the offering to finance the redemption of all of its outstanding senior secured notes due in 2026; repay a portion of the outstanding borrowings under its senior secured asset-based loan facility; and pay related premiums, interest, fees and expenses.
