Delta Plastics Corp. has purchased majority interest in Essex Plastics Inc., a film manufacturer with two plants in the South and $82 million in sales. Essex triples Delta's film sales, and lands it a site in Tennessee, which brings it closer to a region Delta is eager to enter: the Southwest. Together, Essex's Nashville and Pompano Beach, Fla., plants house 37 extrusion lines with capacity for 100 million pounds of polyethylene films per year, particularly for niche industrial packaging markets, said Essex President Aubrey Strul, who retains his interest in the firm.
Delta bought out Strul's partner, Emile Sabga, who is pursuing other interests. Sabga is staying on for a year to head operations, while Essex hunts for someone to fill that post. After that period, Sabga plans to continue as a consultant to the firm.
Delta, based in Newark, N.J., announced the deal Nov. 26. Financial terms were not released.
Delta's latest news comes while it is in the midst of a $12 million investment to boost capacity at all three of its plants, also focusing on niche film products, such as linear low density polyethylene films and metallocene blends.
As for the acquisition that Delta hoped to make in the Southwest by the end of next year: ``This is going to keep us busy a little while,'' said Irwin Friedman, Delta president.
In fact the entire Sigma Plastics Group — of which Delta is part — is in an ``expansion mode,'' according to its chairman, Alfred Teo.
Earlier this year, Zeta Consumer Products Corp. of Little Falls, N.J., bought Tucker Housewares from Mobil Chemical Co., taking Sigma into the brand-new arena of injection molding. Zeta is boosting blown film capacity to launch Tucker-brand trash bags.
Also this year Sigma Stretch Film announced cast and blown film capacity expansions taking place this year and next at its U.S. and Canadian facilities.
Plus Sigma Plastics is adding one more Greek letter to its cast of companies: Make way for Epsilon Polyolefin Corp., which made its debut last month at Pack Expo in Chicago. Neither Friedman nor Teo would comment on the newcomer, except to say that it has a plant in South Plainfield, N.J. At Pack Expo, Edward Weiss, Epsilon's executive vice president, said the firm could be producing film for the U.S. market by next year.
In buying Essex, Delta has absorbed a direct, and successful, competitor, Friedman said. It will operate as a Delta subsidiary, with independent marketing and sales and Strul as president.
At its 35,000-square-foot plant in Nashville, and 117,000-square-foot headquarters plant in Pompano Beach, Essex makes low density PE, linear LDPE and high density PE monolayer and coextruded films and metallocene blends, for printed and unprinted bags, shrink film, bundling, stretch banding, laminating, high-speed sealing film and other custom industrial applications. It employs 350.
``We were the first firm in the U.S. to introduce high-molecular-weight HDPE into the custom packaging arena in 1982, and among the first to introduce LLDPE in 1983,'' Strul said. ``The clients we serve are almost exclusively through distributors. We provide innovative packaging solutions to the industry.''
Though Essex doesn't quite give Delta a foot in the Southwest, it beefs up its Southwest customer base, Strul said. He said Essex eventually will add 50,000 square feet of manufacturing space at the Nashville plant, which sits on three acres. He already is preparing the facility for growth, by installing an automated materials-handling system, including six storage silos.
After Strul's partner, Sabga, decided to opt out of Essex to join his brothers in the Florida construction business, Strul and Friedman began talking about teaming up. Friedman said Essex has a reputation as a quality extruder and converter.
``In our ever-consolidating industry, it has become increasingly important that we take full advantage of every opportunity to be, and to stay, healthy and profitable.''
Friedman now holds a seat on Essex's board of directors. Strul keeps half of the voting stock and board seats. Teo is chairman.
By far the biggest piece of Sigma is film — with more than 230 extrusion lines total and $380 million in sales — but it thermoforms 5.5 million pounds of plastic cups and plates a year in Macomb, Ill., and operates more than 100 injection presses through Tucker, Teo said. Sigma is based in Lyndhurst, N.J.
Delta's chunk of the group's film sales was about $40 million from plants in Newark, Chicago and Marshville, N.C. Friedman would not disclose capacity.