Another vinyl siding operation in North America is for sale following an active year of acquisitions. Emco Ltd. of London, Ontario, announced Feb. 6 that it plans to sell itsBPCO Inc. siding operation in Acton, Ontario. The operation had sales of about C$55 million (US$39.3 million) last year and runs 11 extrusion lines, according to Richard Grogan, Emco chief financial officer. He estimates that about 30 percent of the company's sales are exports to the United States, with the rest of sales in Canada.
``I expect somebody will buy it,'' said Stephen Senzer, president of market research firm Sabre Associates Inc. of West Cornwall, Conn. ``It is one of the largest in Canada, provides a production base thereand has a good product line.''
Emco said it wants to sell BPCO and Emco's Environmental Products Group, to focus on its core businesses of wholesale distribution and building products. The environmental group, which makes petroleum and petrochemical safety equipment, is not involved in plastics. Emco's remaining major plastics business will be Waltec Plastics, a custom injection molder in Midland, Ontario.
Grogan said BPCO has not been profitable for more than a year because rising PVC resin prices have squeezed margins. He said the business is not a major player in North America and will have a better future with a ``more significant player'' in siding.
BPCO completed an in-house com-pounding facility last month to wean it off purchasing compounds in the merchant market.
Emco said the book value of the two businesses it plans to sell totals about C$70 million (US$50.1 million). Grogan said the siding market is strong and that Emco expects to get ``a good price'' for BPCO.
Prior to the announcement, Emco had not had serious discussions with potential buyers, but the company expects to sell BPCO by the end of June.
Senzer said he expects other siding producers to become available in the market soon, as the industry continues to restructure.
Late last year, Genstar Capital Corp. of Toronto bought U.S. and Canadian siding operations from Alcan Aluminium Ltd. of Montreal. Westlake Group of Houston announced in October it had bought the vinyl siding and window businesses of Sauder Industries Ltd. of Vancouver, British Columbia.
Earlier in the year, Jannock Ltd. of Toronto bought Bird Corp.'s siding operation in Bardstown, Ky.
Emco bought the Acton operation, about 25 miles northwest of Toronto, in 1987 from Imperial Oil Ltd. of Toronto. The operation was the first vinyl siding plant in Canada when it started in the mid-1950s.
Emco had sales of C$1.1 billion (US$787 million) for the year ended Dec. 31. Profit was C$3.5 million (US$2.5 million).