Diversified, privately owned Smorgon Consolidated Industries Pty. Ltd., which includes a large PET blow molding division, is on the market. The division, Smorgon Plastics, based in Wetherill Park, Australia, is likely to net A$70 million (US$52 million), according to financial analysts, who speculate that likely buyers include Australian and overseas plastics companies, including North American firms.
SCI spent A$10 million (US$7.4 million) upgrading the Wetherill Park plant last year. Smorgon Plastics has another PET plant in Melbourne, Australia.
Smorgon Plastics supplies about half the PET soft drink bottles to the Australian market. SCI is unlikely to sell the division to the other major supplier, BTR Nylex Ltd. of Melbourne, because of Australia's Trade Practices Act, which prevents acquisitions that create monopolies.
Graham Smorgon, SCI chair-man, said the firm's directors have appointed a bank to advise it on ``divestment options, market conditions and the timing of any sales.'' He said it will take some time to complete the process and the company will continue to run normally until then.
Since the Smorgon family announced the sale, SCI has not commented on plans for specific divisions, which also include steel, building products, meat packing, forest industries and fencing.
Smorgon Plastics recently formed a joint venture with a Malaysian firm to make PET bottles for bottlers in Asia.
SCI is ranked as Australia's third-largest private firm, with 1994 sales of A$1.25 billion (US$928.8 million), according to Business Review Weekly.