Borden Inc. is seeking buyers for its worldwide plastics packaging business, which had estimated 1995 sales of $625 million. The Columbus, Ohio-based food and household products giant announced the plan Jan. 22. The news was not a surprise, since the company underwent a leveraged buyout last March.
``The thinking was that the business would benefit most from being on its own,'' said Nicholas Iammartino, vice president for public relations for Borden. ``A couple years ago we decided to split the company into 10 different businesses, anyway, so now it is nine, and the packaging business is strong.''
Borden's worldwide packaging business makes a wide range of PVC and polypropylene films, including the Resinite and Proponite brands, and rigid containers. Nearly $250 million of its sales came in North America, slightly morethan $300 million in Europe and $75 million in the Asia/Pacific region. The firm placed 14th in Plastics News' 1995 ranking of North American film and sheet makers.
A company statement said the proceeds of the sale will be used for other general business purposes that were not specified.
C. Robert Kidder, Borden's chairman and chief executive, said in the press release that the packaging business should benefit under new ownership.
``We expect the buyer to be someone who does have the focus and resources to capture the full potential and value of this business,'' he said.
Tim Burns, president of Crani-al Capital Inc., a Cleveland-based packaging consulting firm, said the move was not unexpected.
``It probably shouldn't surprise anyone, and it has been rumored for some time,'' he said.
In fact, a competitor to Borden in oriented polypropylene films said in May that the firm was for sale. Borden officials at the time would not confirm or deny the assertion, but they added that they were looking for places to ``build scale'' and technologically improve the OPP unit.
Burns said the packaging industry continues to be in a consolidation mode, and now is a good time to sell.
``It is a strong integrative play,'' he said. ``It is a decent time to be doing it. There are other big consolidations and divestitures going on right now.''
He referred to the recent announcement that James River Corp. of Richmond, Va., would divest its plastic packaging business. Mobil Corp. of Fairfax, Va., sold its plastics division to Packaging Corp. of America late last year. In each case the sales were proposed to better focus the parent firm on core businesses.
The Borden plastic business, based in North Andover, Mass., operates plants making Resinite PVC-based films in North Andover; Griffin, Ga.; Gainesville, Texas; Edmonton, Alberta; and West Hill, Ontario. It makes OPP Proponite film at a plant in North Andover.
In Europe, Borden's plants are in Bandour-lez-Mons, Belgium; Fecamp, Pithiviers and Barbezieux, France; Apeldoorn, Venlo, and Benningen, the Netherlands; Terate, Italy; Alicante, Spain; Southampton and Bridgwater, England; Edinburgh, Scotland and two facilities in Vanderbijlpark, South Africa. In the Asia/Pacific area, the Borden plants affected are in Braeside and Kirrawee, Australia, plants in both Auckland and Christ-church, New Zealand, and a joint venture film plant in Shimodate, Japan, with Hitachi Ltd.
Borden Inc., the parent company, had 1995 annual sales of $6 billion.