In sync with a yearlong shake-up in the stretch film business, Illinois Tool Works Inc. has acquired Chapparal Films Inc., adding five-layer cast film to its niche products. Chapparal's plant in Mauriceville, Texas, operates two cast lines to produce five-layer polyethylene films using metallocene technology, mainly for pallet wrap applications. Jack Shirrel, vice president of film operations for ITW Mima, said Chapparal, like Mima, will operate as a separate company under public parent ITW's Specialty Packaging Systems group, based in Glenview, Ill. The sale was final Sept. 13. Terms were undisclosed.
The purchase complements ITW Mima's capability for coextruded three-layer blown film, which it makes in Douglasville, Ga. In April, Mima announced that by year's end it also would be manufacturing blown stretch film for the European market, at a brand-new plant near Waterford, Ireland. At that time, Shirrel said ITW Mima's growth strategy was to target areas of the stretch film market where its stretch wrapping machinery gave the company an edge over its competitors.
``Mima came to realize that some customers are just more prone to go with cast film,'' ITW Mima spokesman Peter Vilardi said by telephone from company headquarters in Tamarac, Fla.
He added that Chapparal's cast products will make ITW's offering of stretch films more complete.
``Blown film tends to be quite a bit stronger than cast film,'' said Paul Feeney, executive vice president at AEP Industries Inc., which uses both cast and blown extrusion technology.
``Cast film doesn't make as much noise coming off the roll ... and tends to be more clear.''
Chapparal plant manager Ken Johnson said 60 percent of Chapparal's cast films are metallocene. The company employs 42. He would not disclose capacity or sales.
Like Mima, Chapparal seemed geared for expansion this year. In February the firm boosted cast film capacity at Mauriceville, starting up its second line. A month later, it annnounced plans to tap the Mexican market through a joint venture with an undisclosed partner, but that deal never gelled, Johnson said.
In the past year, the stretch film industry has seen a string of consolidations and expansions, even a couple of newcomers, such as Montreal-based Intertape Polymer Group Inc., which is spending roughly $17 million to add 100 million pounds of stretch film capacity this year at Danville, Va.
Huntsman Packaging Corp. announced Sept. 17 that it will expand its PE pallet wrap market share by buying Deerfield Plastics Co. in South Deerfield, Mass. And in April, Sigma Plastics Group announced a succession of cast and blown stretch film capacity expansions at its U.S. and Canadian plants that should be in place during the next year.
Armin Kaufman confirmed that Armin Plastics still plans to enter the cast and blown PE stretch film business, as previously announced, spending $15 million to bring on at least 75 million pounds of capacity by April, despite an already saturated, and hotly competitive, market.
``There is an overflow of stretch film,'' said Kaufman, Armin president. ``I think the stretch business is tough today and will be even tougher to deal with in the future. But we feel we belong there.''
AEP's Feeney agreed that the pallet wrap business is very competitive - he estimated current overcapacity at about 30 percent. But spokesman A. Richard Hurwitz at Atlanta-based Atlantis Plastics Inc. said domestic overcapacity for stretch film is closer to 10 percent, with capacity of about 1.2 billion pounds per year.
Stretch film makes up 40-45 percent, roughly $119 million, of Atlantis' total sales, said Hurwitz, who is vice president of corporate communications. AEP, which nets about $96 million annually in PE stretch pallet wrap, stands to grow that business considerably when its purchase of Borden Global Packaging is completed sometime next month.
``There are a lot of people in the [stretch film] business,'' Feeney said, ``and I don't know how well they're doing. To the best of my knowledge, I don't know anybody making huge amounts of money in pallet wrap.''
Kaufman noted that Armin expects to find applications for stretch film other than pallet wrap, and wants to be a single-source supplier for its customers. The Jersey City, N.J., company is finalizing sites for the lines.