Rubbermaid Inc. gained about 30 percent of Eastern Europe's plastic housewares market by purchasing Dom-Plast SA of Slupsk, Poland. The Wooster, Ohio, housewares major expects to pay $18.8 million for its second strategic acquisition in Europe this year. In March, it bought Injectaplastic SA of France.
Dom-Plast had sales of $22 million last year and predicts it will reach $30 million in 1995, according to Rubbermaid spokeswoman Lorrie Paul Crum. She said Eastern Europe is a fast-growing market because plastics housewares are a relatively new choice for consumers who lived under communist rule for decades. Dom-Plast ``provides a gateway to Russia'' and will be able to export to Western and Northern Europe.
Dom-Plast makes about 120 houseware items, including food storage containers, dishes, cabi-nets, hangers and juvenile products. It primarily injection molds its products using polypropylene and polyethylene. Crum said Dom-Plast's nonhousewares business, which makes crates and other goods, was not part of Rubbermaid's agreement and it was sold to former Dom-Plast managers.
Rubbermaid's push will heat up competition in Europe, where Curver BV of the Netherlands and the U.S.-based Tupperware division of Premark International Inc. are major players. Rubbermaid has been trying to expand in Europe after its former joint venture with Curver dissolved in 1994.
Tupperware recently entered Eastern European markets ``in a small way,'' according to Christine Hanneman, Premark spokeswoman. Europe, mainly western countries, is its largest market and accounts for about 40 percent of Tupperware's sales. Premark plans to make Tupperware a separate company next year.
``We took time to enter [Eastern Europe] because the economies initially weren't stable,'' Hanneman said in a telephone interview. ``We expect over time they will contribute to our profitability.''
Analyst Eric Bosshard of Roulston & Co. of Cleveland said Rubbermaid is not taking a big risk in Eastern Europe's economy because the Dom-Plast purchase ``is a small step to establish a presence.''
``[Rubbermaid] can leverage the business and grow,'' Bosshard said.
Crum said Rubbermaid will expand Dom-Plast's capacity and product line, as it has done with Injectaplastic, which had sales of $19 million last year. The two operations will be Rubbermaid's key housewares suppliers in Europe because transportation costs make U.S. imports uncompetitive.
Andrzej Debowski, Dom-Plast's president, will continue to head the 675-employee Polish operation. He started Dom-Plast in 1982 in his basement, using tractor parts to make injection molding machinery. Poland's move to a free market economy in 1990, a year after communist rule ended, allowed Debowski to upgrade his technology, products and distribution. Rubbermaid plans to invest in further upgrades and may incorporate some Dom-Plast design ideas into its own product line.
Poland's Securities Commission announced its approval of the Dom-Plast deal on Nov. 9 but Rubbermaid held off its announcement until Nov. 14, when it made a tender offer for the remaining 25 percent of Dom-Plast shares. It paid Debowski 15.4 zlotys (US$6.25) per share in cash - about 20 percent higher than the last quoted market price - for his 75 percent stake in Dom-Plast. Rubbermaid's tender offer is at the same share price.
The Polish securities commission said Rubbermaid was the first company to buy a public Polish firm since the country opened its markets.
Debowski will report to Larry Porcellato, managing director of Rubbermaid's European home and seasonal products business based in Luxembourg.
Crum said Rubbermaid's push to generate a third of its sales in international markets will get a boost from its recent appointment of David T. Gibbons as president and general manager of its Home Products Division. Gibbons, currently general manager of 3M Co.'s Home and Commercial Products Division, has marketing experience in Asia.
Gibbons assumes his new position Dec. 1, taking over from Charles A. Carroll, Rubbermaid's president and chief operating officer, who has headed up Home Products since its former president, Fred Grunewald, departed in May.
``I'm glad to see an outsider come in,'' Bosshard said. ``He will have a fresh perspective and bring some insights to Home Products, which is in need of help because it is not having a good 1995.''
Rubbermaid's profit for nine months was down 23 percent despite a 10 percent increase in sales. Home Products is its biggest division.