In a stunning year-end move, major film manufacturer and converter James River Corp. announced Dec. 18 it will jettison its $540 million-per-year plastic flexible packaging business. The firm hired Merrill Lynch & Co. to advise on the sale of the James River flexible packaging and CZ Inks businesses. The sale will include five film plants, four lamination and coating plants, a thermoformed container plant and a headquarters office. The firm will retain its fiber-based folding carton, paperboard and food-service businesses, which includes 18 plants, and had estimated 1995 sales of $900 million.
``This really began early in 1994, when we announced we would restructure and adjust the focus of our company,'' said Richard Elder, vice president of corporate communications for the Richmond, Va.-based firm. ``In August of 1995, we spun off some of our business into what is now Crown Vantage Inc., a specialty-packaging company, and this move is the result of our examination of our business.''
Elder said the refocusing process determined that keeping the paper and fiber products side of the business offered better opportunities than plastic, given that James River manufactures of its own pulp.
``Obviously, we don't make our own [plastic] resin,'' he said, ``and on the paper side, we control the whole process.''
Elder said proceeds from the sell-off will be used to reduce the company's estimated $2.5 billion in long-term debt.
James River will have continued small involvement in some plastic products, including a plastic cutlery business it purchased in 1995, and a joint venture to produce foam cups.
The firm placed 10th in Plastics News' 1995 North American film and sheet manufacturers ranking, with film and sheet sales in 1994 of $420 million.
Film plants included in the proposed sale are operations in Newcastle, Del.; Orange, Texas; Greensburg, Ind.; Jackson, Tenn.; and Aguascalientes, Mexico. Lamination and coating plants are located in St. Louis; Dayton, Ohio; Shreveport, La.; and San Leandro, Calif.
The thermoformed container plant is in Williamsburg, Va., and the packaging business' headquarters is in Milford, Ohio.