TORONTO - Gecamex Technologies Inc. plans to boost its automotive opportunities by purchasing 49 percent of Versatech Canada Ltd. of Toronto, a producer of metal and plastic shipping systems for auto parts. Gecamex, based in Leamington, Ontario, supplies plastic and metal auto parts to Detroit's Big Three and first-tier suppliers.
Gecamex President and Chief Operating Officer Fraser Wray said his firm's experience with automotive technology and sales should help Versatech expand its reusable and recyclable shipping systems business. Wray and three other former Magna International Inc. officials joined Gecamex in July, when Gecamex bought Raytak Automotive Systems Inc., formed by the former Magna officials in 1993.
Until 1993, Wray was president of auto parts producer Decoma International Inc. of Downsview, Ontario, a unit of Magna. Other Gecamex principals include vice president of plastic operations Karl Poehlmann, who formerly was vice president of Decoma Plastics, and senior financial advisor Steve Akerfeldt, formerly chief financial officer of Magna of Markham, Ontario.
``We anticipate sales to increase,'' said Versatech spokesman Paul Kelly. ``They have a good technological background and their sales will help support us.''
Versatech Canada makes its shipping systems from metal components and corrugated polypropylene sheet. It vacuum forms and assembles the sheet, which it sources from Canadian suppliers. An undisclosed auto producer uses Versatech's systems to protect parts during shipment. Kelly said when the plastic components wear out, Versatech regrinds them and molds the regrind into consumer products such as paint trays.
Gecamex estimated Versatech Canada's sales last year at more than C$9 million (US$6.39 million). Wray said Gecamex's sales are about C$8 million (US$5.68 million) per month.
Gecamex agreed to pay about C$2.8 million (US$1.99 million) for the stake in Versatech Canada in a deal it expects to close in February. The Lee family will retain control of Versatech Canada with its 51 percent interest.
Gecamex, traded on the Toronto Stock Exchange, was formed in July 1993. Its three divisions are Joh, a producer of powertrain-cover and sealing systems using thermoset polyesters and other materials; Bauerhin, a small injection molder and producer of auto trim and other components with facilities in Mexico and Ontario; and Apex Metals, which stamps metal auto components. Gecamex's chairman, Matt Baumgartner, helps new auto parts firms use German technology and capital.
Versatech Canada's parent, Versatech Industries Inc. of Toronto, is traded on Nasdaq. Kelly said Versatech Canada, the firm's main operating subsidiary, began making plastic and metal shipping systems in 1991.