TORONTO - Vinyl extrusion giant Royal Plastics Group Ltd. plans to diversify into new technologies and markets by acquiring Ecopal Technologies Inc. Ecopal makes plastic pallets mainly using recycled polyolefins. It also makes building materials such as fake shale shingles using blends of recycled polyolefins and rubber.
The Stoney Creek, Ontario, firm has a manufacturing plant in Battle Creek, Mich., and plans to establish another in the Toronto area, founder and majority shareholder Herbert Hoedl said.
Royal announced Sept. 3 that it agreed to acquire 80 percent of Ecopal for undisclosed terms and expects to conclude the deal by Sept. 30. Hoedl said in a telephone interview that he will hold the remaining 20 percent in the purchased company, which will be called Royal Ecoproducts Ltd.
Royal spokesman Mark Badger said Ecopal's efficient blending and molding technology will complement Royal's efforts to develop recycled plastics building materials, on which he would not elaborate. Royal claims to operate one of North America's largest rigid vinyl recycling facilities, Royal Group Resources, in a 75,000-square-foot industrial complex in Woodbridge, Ontario.Badger said in an interview from Royal's Woodbridge headquarters that Ecopal also will launch his firm into the ``dynamic and growing'' plastic pallet market.
Ecopal holds patents in the use of recycled plastics to make pallets and building products.
Ecopal moved its manufacturing facility from Windsor, Ontario, to Battle Creek in January because a large space was available for lease, and because it markets much of its output in the United States, Hoedl said. It has several compression molding presses and plans to install two more.
Ecopal uses high-intensity mixing to blend and melt recycled polyolefins. The melt is discharged to a fast-closing compression press that makes pallet parts or other products. Hoedl said the technique allows production of large parts using clamping forces of 500 tons or less. Con-ventional presses would need forces of 3,000 tons or greater to make the parts, he said.
``These technologies will en-able us to manufacture lightweight, long-lasting and affordable building products,'' Royal Chairman, President and Chief Executive Officer Vic De Zen said.
Hoedl said food and bottling industries are among Ecopal's main pallet markets. One pallet has an extruded top frame that Ecopal plans to make at a new Toronto-area facility. It now uses an undisclosed extrusion firm.
Ecopal's Toronto plant is likely to be separate from Royal's extrusion operations and will focus on compression molded building products, Hoedl said. Its Stoney Creek plant houses lab, engineering and development activities.
Hoedl's background in-cludes executive positions with auto parts producer Decoma International Inc. of Markham, Ontario, in the late 1980s and a stint with Husky Injection Molding Systems Ltd. of Bolton, Ontario, until 1990.
He and Royal officials did not disclose sales for Ecopal.
Separately, Royal said Aug. 29 it completed a private placement for senior unsecured notes maturing August 2006 with U.S. institutional investors. It will use the US$100 million to repay debt.