Ekco Group Inc. of Nashua, N.H., has signed a letter of intent to sell the assets of Ekco Consumer Plastics Inc. to Alpha Holdings Inc. of Dallas, essentially removing Ekco from the molding arena.
However, Ecko will continue to mold a few items within the company's core business at its Hamilton, Ohio, facility, which makes cleaning products.
Ekco plans to move its Easthampton, Mass., molding facility to the Hamilton plant. Earlier, the firm had announced it was closing both Easthampton and Hamilton and moving the work to its plant in Obregon, Mexico. Those plans were changed, however.
Jeffrey Weinstein, president of Ekco Consumer Plastics, said that since recent changes in the company's top management, Ekco has been evaluating all its businesses.
``We made the determination that we want to concentrate on our core businesses, which are kitchenware, bake ware, cleaning and pest-control products,'' he said in a telephone interview.
Ekco Consumer Plastics specialized in storage containers, laundry baskets, lawn and garden items and office accessories. In November, Ekco Group announced that it sold its Phoenix molding facility to Plastican Inc. of Leominster, Mass., and would subcontract its molding requirements to AB Plastics Corp., a custom injection molder in Gardena, Calif.
Then last month, Ekco said it changed its subcontract molder to Mulay Plastics Inc., which is manufacturing Ekco's product lines in its Casa Grande, Ariz., plant.
Weinstein said that until the transaction with Alpha is completed, Ekco will continue its contract with Mulay.
Jay Rigby, president of Alpha Holdings, said that for the next six months to a year, ``everything stays in place.'' Although the company operates seven plants nationwide, it will take at least a year to ramp up those plants with additional machinery to accommodate the consumer products business.
``Our [City of Industry] California facility is sold out with industrial business and about 20 percent of Ekco's business is on the West Coast, so there's plenty of opportunity for contract molders,'' said Rigby.
In addition to the purchase of Ekco Consumer Plastics' assets, which included equipment, inventory and molds, Alpha Holdings recently purchased Maid Products Inc. in Hebron, Ohio, from Kraco Inc.
In spite of the rough ride the consumer housewares industry segment has experienced, Rigby believes there is good growth opportunity for his company.
Alpha Holdings specializes in industrial containers such as bakery trays, dairy containers and curbside recycling containers.
``When opportunity to acquire Maidware came up, it really was an effort to diversify our end-product markets,'' Rigby said. ``We're so dependent on those markets, but there's not a lot of growth in them, and we wanted to continue to grow our business.''
Rigby said that the industrial and consumer housewares products have several similarities that make manufacturing for those markets extremely compatible.
``We use the same types of material and the same size machines,'' Rigby said. ``And there are certain times of year that our machine capacity is down with industrial products that the housewares will level out.''
With the acquisition of Ekco's product line, Alpha will have a product mix that is 60 percent industrial and 40 percent consumer housewares.
Alpha plans to lease Ekco's manufacturing facility in Worcester, Mass., and license the Ekco name as it did the Maidware name.
``Both Ekco and Maidware have names that are well-respected in the marketplace and we want to maintain that,'' said Rigby, adding that he plans to maintain the plant's 125 employees as well.
Ekco's Weinstein said the company's wish is to make the transition as ``seamless as possible for our customers.''
The transaction is expected to be complete within the next 60 days.
``There's a lot of positives to this,'' said Rigby. ``We think we can manufacture housewares competitively, and, using our manufacturing capacities, bring more to the customers.''