In a Jan. 4 announcement, Crompton & Knowles Corp. picked up a German plastics machinery maker and hinted at a restructuring that could include the sale of its $100 million specialty ingredients business, which serves the food and drug industries. Treasurer Peter Barna said a sale is the most likely option. If the unit is sold, Crompton & Knowles could use the money for a variety of purposes, including buying back stock or acquisitions, Barna said in a telephone interview.
Crompton & Knowles is the parent of Davis-Standard, the Pawcatuck, Conn., extrusion machinery division that has embarked on a string of acquisitions in recent years, including six plastics machinery companies since 1991.
In the deal announced Jan. 4, the company revealed it purchased Klckner's ER-WE-PA of Erkrath, Germany. ER-WE-PA makes equipment for extru-sion coating, cast film and sheet.
ER-WE-PA had sales of $50 mil-lion, Crompton & Knowles said. Crompton's Davis-Standard Division got its first European production last year, when it acquired McNeil Akron Repiquet sarl of France.
Crompton's biggest business sector-dyes for clothing-faces a stagnant market.
The clothing dye business is going through an industrywide restructuring, according to Compton & Knowles.
Does that mean Crompton & Knowles would use proceeds from selling specialty ingredients to keep marching into plastics machinery?
The company was not saying so explicitly. Its press release said it has hired Salomon Bros. Inc. ``to assist the company in exploring strategic alternatives to maximize shareholder value in the company's $100 million specialty chemicals business.''
Crompton also bemoaned the dyes business, saying that fourth-quarter 1995 earnings will be much lower than 1994. Formal year-end numbers will come out in late January.
Asked if the company will buy more plastics businesses if it sells specialty ingredients, a spokesman said: ``That's always a possibility because you know we've done that, but that's not the stated objective here.''
Barna said: ``We're not trying to become an equipment company. We're still a specialty chemicals company.''
The company, whose fiscal year ended Dec. 30, said it expects 1995 sales of $666 million, 13 percent more than $590 million in 1994.
Crompton's specialty equipment segment, which includes Davis-Standard's extrusion systems, blow molding machines and related process controls, should post 1995 sales of $281 million, about 25 percent of that from international markets. That would be a 43 percent gain from 1994, when the machinery business generated $196 million.
Frank Nissel, president of a competitor in plastics extrusion, Welex Inc. of Blue Bell, Pa., said a rumor about Davis-Standard buying ER-WE-PA circulated last fall at K'95 in Germany.
Nissel wondered who could be next, but said: ``Who's left? Who's really left in the market. Who are they going to buy?''
At Cincinnati Milacron Inc. in Cincinnati, James Abbiati, vice president of plastics extrusion systems, said: ``As an outsider, it certainly looks like the plastics machinery business in their portfolio is their best business.''