RAUNDS, ENGLAND — Schmalbach-Lubeca has sold its non-PET plastics business, Continental Plastics Europe, to RPC Group plc of Raunds for $103.5 million. CPE is a specialty manufacturer of rigid plastic packaging for the food and drink industries. Products include tubs for margarine and ice cream and containers for yogurt, desserts and items sold in vending machines. With 1,700 employees and 12 plants in seven countries, the plastics division expects to have sales of $258.8 million this year.
Schmalbach-Lubeca recently announced plans to acquire Milwaukee-based Johnson Controls Inc.'s PET blow molding operations. With the sale of its non-PET plastics unit, the Rat-ingen, Germany-based firm completed reorganizing its portfolio.
``By concentrating on the core business activities, PET Packaging, Beverage Cans and White Cap Closures, we are essentially improving our global competitiveness as well as our future earning power,'' according to Schmalbach-Lubeca Chairman Hanno Fiedler in a news release.
RPC makes blow molded bottles and injection molded closures and packaging. It has about 1,500 employees and sales of about $155 million. With its purchase of CPE, RPC expects sales to rocket to about $390 million. RPC's investors will be offered two new shares for every five held as part of the acquisition.
RPC also is investing almost 6 million ($10 million) in a new plant to blow mold larger liquid containers. The company plans to open its new molding plant for 10- to 30-liter containers by March on its existing industrial site in nearby Rushden. It will be capable of making 4 million containers a year.
The bigger containers will meet increased demand for packaging products such as motor oil, automotive antifreeze and agrichemicals, according to Chris Sworn, RPC finance director.
In the past year the publicly traded firm also has opened a second closure injection molding plant.
The $1.6 million unit is its second at Halstead, England, and molds snap caps and spout closures. The two have an annual capacity of 200 million closures, according to the firm.
RPC is installing three new injection machines, bringing its total to almost 30 presses at Halstead.
The company, which includes among its major clientele Nestle, BP, Heinz, Akzo Chemie and ICI, supplies containers for paint, sauces, drinks and lubricating oils. It claims a 75 percent domestic market share for plastic-packaged surface coatings, including paint, and 65 percent of all sauces in plastics.
More than half of its polymer use is polypropylene, followed by 28 percent high density polyethylene and 16 percent PVC.
Stable polymer prices helped raise first-half profit by 22 percent to 4.8 million ($7.8 million). Raw materials represent 30 percent of overall costs. Sales were down marginally to 48.3 million ($78.7 million), RPC said.
U.K.-based correspondent Richard Higgs contributed to this story.