Two Toronto-area companies are recent victims of fierce competition and shrinking profit margins in the resin furniture market. A total of 35 injection molding presses at two companies, all used in the recent past to make plastic outdoor furniture, will be sold or auctioned this fall, according to spokesmen for the receiver for both companies.
The assets of Eurocollection Canada Ltd., which has facilities in Brampton and Brantford, Ontario, will be auctioned in September. A date has not been set yet, according to Wayne Palmer, a representative of creditor's receiver Richter & Partners Inc. of Toronto.
The 7-year-old company's 20 injection molding machines have been shutdown and 80 employees idled since June when the company was forced into bankruptcy, Palmer said. He cited growing competition in the patio furniture market, coupled with a decreasing marginal profit in that industry, as reasons for the company's collapse. Palmer estimated Eurocollection's annual business at C$11 million (US$8.1 million).
In Mississauga, Ontario, Richter & Partners also hopes to sell assets of patio furniture molder Emgee Products Interna-tional ``as a going concern,'' said Bram Rosen, a partner with the company.
Emgee Products has 15 injection presses, proprietary molds and related equipment at its Mississauga plant, according to Rosen.
All assets will be included for sale, but the leased building housing the assets is not to be included, he said. Rosen estimated Emgee's annual sales at about C$15 million to C$20 million (US$11.1 million to US$14.8 million).
An undisclosed bank forced Emgee into receivership on Aug. 4, Rosen said.
John Greenberg, a partner in the privately held Emgee, declined comment on his firm's demise.
Besides keeping the operation intact, Rosen said Richter also would sell the assets on a lot-by-lot basis if the result is a higher price.
Richter is accepting bids until Sept. 1.
According to Palmer, Eurocollection Canada Ltd. was formed from the assets of M&K Plastics in Brampton in 1987.
He noted that the Brampton facility previously produced not only plastic outdoor furniture, but a number of plastic automotive components.
At the time of the closing, the company's production was ``essentially geared to patio furniture,'' Palmer said.
As Eurocollection expanded, it bought another furniture maker, Casual Plastics in Brantford, some 60 miles away, near Hamilton, Ontario.
Neither Eurocollection's major stockholder, Keith Alexander, nor its former president, Michael Fuchs, were available for comment.
Both companies marketed their products to ``major department store chains in both the U.S. and Canada,'' said Palmer.