Berry optimistic about cup, containers business

By Jim Johnson
Senior Staff Reporter

Published: February 6, 2014 11:51 am ET
Updated: February 6, 2014 1:06 pm ET

Image By: Berry Plastics Berry Plastics has reopened a closed plant to make polypropylene Versalite cups.

Related to this story

Topics Sustainability, Injection Molding, Thermoforming, United States, China, Polypropylene, Food service

When it comes to Berry Plastics Group Inc.'s fledgling Versalite business, the company likes where it's at.

Enthusiasm remains high at Berry about the decision to reopen a shuttered plant in Kentucky to launch the line of polypropylene beverage cups and food containers.

CEO Jon Rich, during a call to discuss the company's fiscal year first quarter results, shared his view for how Versalite is progressing.

"Versalite continues to be a very significant opportunity for Berry. And we are more excited today than we have ever been," he said.

"We are currently working with six customers that represent demand of over three billion units annually. Currently, we are restraining the number of customers that we work with to ensure our ability to supply," he said.

To help with that supply, the company already has ordered more manufacturing equipment that will take up the last remaining space at the Versalite plant in Madisonville, Ky., the CEO said.

Berry, based in Evansville, Ind., currently is working with four companies regarding use of Versalite for both hot and cold cups. Another company in the fold represents a new breakfast food that will be sold in the grocery channel and the final firm is working with Berry to use the plastic for hot food in quick service restaurants, the plastics company said.

"Versalite," Rich said, "is a technology that provides thermal management and is not just a drink cup."

"We continue to be limited only by our ability to add equipment and we are working with our machine vendors as they work to scale up and meet our goals for future capacity," the CEO said.

Versalite is a big swing for even for a company the size of Berry. When word of the decision to reopen a former plastics closures facility in Madisonville was released in 2012, the company indicated a $96 million investment.

Rich, during the conference call, also provided some additional insight into the company's recent deal to acquire a 75-percent interest in Qingdao P&B Co. in China.

Asked during the conference call whether P&B represents a launching point for additional acquisitions in China, this is what Rich had to say:

"We're not making any assumptions of further acquisitions. We have a very robust growth plan for that acquisition already, and we are really excited about it."

"You should see us investing and expanding in conjunction with that acquisition, and then we'll see what opportunities lie beyond that," Rich said.

Partnering with an existing business was the way to go with Berry, the CEO said. "I think it was important for Berry to take that step because we felt that greenfielding in China would be difficult for us. So that was really important for us."

P&B uses thermoforming, injection molding and automated assembly manufacturing processes to make packaging for multiple markets, predominately food and personal care, in both China and globally.

Berry also reported swinging to a profit on higher sales during the company's fiscal year first quarter.

The company earned $6 million, or 5 cents per diluted share, on sales of $1.14 billion for the quarter ended Dec. 28. That compares to a loss of $10 million, or 9 cents per diluted share, on sales of $1.07 billion for the previous first quarter.

The company finished the quarter in line with management expectations despite increasing raw material costs and what Rich called subdued consumer and customer demand.


Comments

Berry optimistic about cup, containers business

By Jim Johnson
Senior Staff Reporter

Published: February 6, 2014 11:51 am ET
Updated: February 6, 2014 1:06 pm ET

Post Your Comments


Back to story


More stories

Image

Optical disc molder OEM getting into micromolding with acquisition of CDA

August 29, 2014 11:24 am ET

Optical disc replicator and molder Optical Experts Manufacturing Inc. of Charlotte, N.C., has expanded its core business and entered new high...    More

Image

Baxter investing $300 million to expand dialyzers production in Alabama

August 29, 2014 12:53 pm ET

Baxter International, Inc. is expanding its Opelika, Ala. manufacturing location to boost production of dialyzers, a key component of hemodialysis...    More

Image

Obituary: Jerry Williams, Prism Plastics co-owner

August 29, 2014 8:50 am ET

Williams founded Prism Plastics with Rod Bricker and Gerry Phillips, after the three left Huron Plastics Group in 1999.    More

Image

EPA fines RI polymer company

August 29, 2014 1:20 pm ET

A Rhode Island polymer manufacturer has reached a $60,000 settlement with the U.S. Environmental Protection Agency (EPA) for violating federal clean...    More

Image

Haitian's standardization efforts paying off

August 29, 2014 9:53 am ET

Streamlined design efforts and robust export sales helped propel Ningbo, China-based injection molding machine manufacturer Haitian International Hold...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events