TORONTO-Royal Plastics Group Ltd. of Toronto and Rubbermaid Inc. have acquired a 92,640-square-foot building in Woodbridge, north of Toronto, for their consumer storage-shed joint venture. The firms announced Jan. 23 that they have incorporated the venture in the province of Ontario. The joint venture, called Royal Rubbermaid Structures Ltd., should begin commercial production of kits for the sheds in March. The sheds are based on extruded vinyl composite panels and posts using technology developed by Royal.
Gary Brown, Royal executive vice president and chief financial officer, said Royal Rubbermaid paid about C$3.3 million (US$2.34 million) to a private owner for the facility. It was used for light manufacturing and is suitable for profile extrusion without major renovation.
Royal earlier said in its final prospectus for an initial stock offering that the joint venture planned to build a 66,000-square-foot plant to extrude profiles for consumer storage sheds. Brown said the venture decided to take advantage of buying a larger, available plant, but other plans stated in Royal's prospectus remain unchanged. Royal is to contribute a third of the cost of the Royal Rubbermaid facility, which will have five extrusion lines capable of making 20,000 shed kits per year.
Consumer products giant Rubbermaid of Wooster, Ohio, and Royal announced the joint venture in November. According to Rubbermaid spokesman William Pfund, Royal Rubbermaid Structures had not chosen top executives.
Royal went public on Canadian stock exchanges late last year. It raised C$204.2 million (US$149.1 million) by selling subordinate voting shares at C$11.25 (US$8.21) each. The sale included 1.65 million shares bought by underwriting firms that exercised an over-allotment option to buy extra shares.
Royal's shares closed at C$11 (US$7.81) Jan. 24 and had a high of C$11.38 (US$8.08) and low of C$10.63 (US$7.55) since they were issued.
