Berry Plastics Corp. diversified into thin-wall plastic cups with its March 10 purchase of Sterling Products Inc. of Winchester, Va. Officials did not disclose terms of the deal, which resulted in a new Berry subsidiary called Berry Sterling Corp.
Sterling's 1994 sales were $6.5 million. It operates a six-press injection molding plant equipped with printing presses. The deal gives Berry manufacturing capacity in eastern markets.
``[Sterling is] a strong marketing company with innovative products,'' said Berry's Chief Financial Officer James Kratochvil. ``We are strong technically and in manufacturing.''
Berry is a major injection molder of aerosol overcaps and rigid open-top containers. Its 1994 sales of $106.1 million increased 21 percent from the previous year, fueled by growth in all its businesses, Kratochvil said in a telephone interview.
Kratochvil said an especially promising Sterling innovation is a line of large, disposable drinking cups that fit in standard cup holders in automobiles.
``In drive-through [food chains] it is hard to get large paper drink containers that fit car cup holders,'' he said.
The Sterling deal ``gives us immediate penetration into a very fast-growing opportunity in the plastic drink cup market,'' Berry President and Chief Executive Martin Imbler said in a March 10 news release.
Sterling's new line of patented cups has a necked base that fits cup holders, said George Willbrandt, Sterling's former president, now head of marketing and sales for Berry Sterling Corp. The top portion of the cup is much wider than the base, allowing the cup to hold as much as 44 ounces of liquid.
Willbrandt said major fast-food chains, which he would not identify, have test-marketed the cups. Sterling introduced a 32-ounce version of the cup last year and in April will debut a 44-ounce size. Since he and other owners established the private firm in 1983 it has specialized in thin-wall molding of polyethylene cups and lids.
Willbrandt said Sterling contracted out some of the new cup production to Berry last year and was to decide by the end of 1994 whether to expand its Winchester molding capacity or contract out some of its molding as sales of the new cup line grew.
It decided a buyout by Berry made more sense because Berry has three facilities that could locate cup production close to regional markets.
Berry's molding plants are at its headquarters in Evansville, Ind., and in Henderson, Nev., and Iowa Falls, Iowa. Last summer Berry completed a molding facility expansion at Evansville and added five new molding machines to its previous total of about 65.
Kratochvil said Berry still plans to buy CPI Plastics Inc., a large container producer in Newnan, Ga. It announced the plan more than a year ago when it issued $100 million in subordinated notes due in 2004.
Kratochvil did not explain why the deal with CPI was delayed or provide a timetable for its completion. Berry said last year it planned to pay $6 million in cash and assume about $7.5 million in debt for CPI.
