Sweden's Rapid Granulator restructuring

BREDARYD, SWEDEN (Updated Oct. 30, 1:30 p.m. ET) -- Rapid Granulator AB has filed for financial restructuring, according to news reports in Sweden. The company blamed slumping machinery sales and the cost of a recent acquisition of a recycling equipment maker in China.

Rapid Granulator is based in Bredaryd, with its U.S. operations based in Franklin, Pa.

The company will lose 20 million Swedish krona ($2.87 million) this year, according to a report in the Värnamo (Sweden) Nyheter newspaper, which quoted from a letter from CEO Rolf Gren.

The letter reportedly emphasizes that Rapid has not filed for bankruptcy, and that the company will continue with business as usual. The company plans to voluntarily reduce its debt, with cooperation with its lender Nordea Bank AB.

According to news reports and machinery sources, Swedish law allows companies that have filed for reorganization to restructure their debt and modify their labor contracts.

In June, at NPE2009 in Chicago, Rapid announced that it had purchased Avian (Shanghai) Machinery Co. Ltd., in order to serve the market in Asia. Avian makes pulverizers and larger granulators.

Rapid was established in 1942, and has plants in the United States, Germany, France, Italy, Singapore, China and the Middle East. The company has 300 employees, and supplies equipment to customers in 150 countries.

Rapid Granulator is a sister company to Conair Group Inc., which are both under the umbrella of International Plastics Equipment Group Inc.

Chris Keller, president of Cranberry Township, Pa.-based IPEG and Conair, said in a statement that Rapid’s action is specific to its Swedish business entity.

“It has no bearing on Rapid’s business outside Sweden. Furthermore, while Rapid and Conair share common ownership (IPEG), the activities of Rapid AB have no impact on the Conair business,” he said.

“Conair earlier this year announced its own cost saving measures in order to be a strong and profitable business in the current economic environment. Rapid is now acting similarly to ensure its future success,” Keller said.

In June, shortly after NPE2009, Conair laid off an unspecified number of workers in at its headquarters in Cranberry Township and its factory in Franklin, Pa., blaming the severe, prolonged weakness in the equipment market.

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