LONDON — Rexam plc is slimming down with a major disposal of noncore businesses, but still plans to expand its plastic cosmetics packaging capacity in the United States.
The London company intends to spend as much as £5 million ($8.1 million) on a new cosmetics packaging plant, probably near Rexam Cosmetic Packaging Inc.'s existing lipstick case operation at Torrington, Conn.
Yves Dominioni, president and chief executive officer of Rexam's Beauty Packaging division, disclosed the plans in a March 17 interview in London.
The new plant will manufacture a range of the group's spray pump products. It will spearhead Rexam's full-scale launch in North America of its miniature perfume sample spray packs, the Paris-based executive said.
Meanwhile, Dominioni revealed that Rexam beauty packaging's commodity, 1-inch aerosol valve operations in Europe are for sale under the company's restructuring program.
Dominioni said Rexam is about to launch a new lipstick case mechanism in the United States with a £3 million ($4.86 million) investment at Torrington. The firm now is presenting the new mechanism, which has global application, to customers.
Rexam Cosmetic Packaging's existing operation at Torrington is lipstick tube injection molder Mark Industries Inc., acquired for about $41 million in January 1996.
Dominioni said the company will pick one or two alternative sites for a new U.S. plant by June, and work will begin later this year, with start-up planned for 1998. Initially, it will be equipped with three to six injection presses, each below 100 tons of clamping force, as well as a range of assembly machinery.
Rexam's European sample spray plants chiefly use Krauss-Maffei injection presses. The company has not identified equipment suppliers for the new operation, but Dominioni said it will place orders shortly. He added that he hopes that the company will buy molds in the United States.
The polyethylene spray packs originally were launched in Europe four years ago, and production reached 20 million units annually.
The new U.S. plant will have a 40 million-unit capacity, and in a second phase will take the total to almost 100 million units a year, he said.
Dominioni said the plant probably will be in Connecticut, close to customers. He described the potential sample spray market in North America as ``fantastic.'' European clientele include Dior, Guerlain, Shiseido, Estée Lauder and Elizabeth Arden, and some sprays already are being imported to North America.
Rexam claims to be the No. 1 global supplier of lipstick dispensers and sample spray packs, and No. 3 globally with its other cosmetic pumps. The company estimates that it produces a third of the world's lipstick cases.
Rexam hopes to increase that share 10 percent during the next three years, according to Dominioni. With many international customers moving into developing countries, Rexam is looking at expanding in Asia and Latin America, he said.
Rexam Beauty Packaging expects nearly to triple sales to £350 million ($567 million) by 2000.
The company is looking at several acquisition and joint venture opportunities, according to Dominioni.
Even so, his division will not escape unscathed from the diverse parent company's wide-ranging restructuring. He identified the Rexam Dispenser operations, with 1-inch aerosol valve manufacturing units in Italy and the United Kingdom, as businesses up for sale. A German plant closed last year.
Dominioni explained that, unlike Rexam's other cosmetic products, the valves are commodity items in a stable, but fiercely competitive market. Rexam prefers to capitalize on its special technology strengths elsewhere.
In Europe, the beauty packaging division has lipstick case plants at Anecy and Simandre, France, and Bournemouth, England, and two pump manufacturing units in France, in Le Treport and Tournus.
Businesses earmarked for sale within the beauty packaging sector have sales of £53 million ($85.9 million).
Dominioni said that division sales after the restructuring will stand at £120 million ($194.4 million).