As part of its globalization strategy, Graham Packaging Latin America, a unit of the Graham Packaging Group, formed a new subsidiary May 6, when it bought the assets of Rheem Graham in Brazil.
Terms of the deal were not disclosed.
``The new company — Graham Packaging do Brasil Indústria e Comércio SA — will have immediate access to the full range of Graham technology, our capital resources and our global support and training network,'' Ken Graham, senior vice president of global business development for parent firm Graham Cos. of York, Pa., said in a news release.
``There is still enormous potential in our traditional market segments such as automotive lubricants and household chemicals in Brazil,'' he said. ``But, based on our experience in the United States, Europe and elsewhere in South America, there are real opportunities in other market segments as well, particularly in food packaging.''
Rheem Graham, which was licensed to use Graham's name and proprietary technology, produces high density polyethylene bottles in Brazil. It had been a subsidiary of Rheem Empreendimentos, a can maker. Under the acquisition agreement, Rheem Empreendimentos now owns 20 percent of Graham Packaging do Brasil and will provide administrative support as the firm grows.
``Our purchase will allow the new company to focus on the rapidly expanding market for plastic packaging in Brazil,'' Graham added. ``This is a very exciting market and we expect to develop it fully.''
Geoff Lu, vice president of Graham Packaging Latin America, said the company will update existing equipment and expand capacity in Brazil as the market grows. ``This is an emerging market and we fully expect to both expand the existing plants and establish new ones,'' Lu said.
Graham Packaging do Brasil operates three of Rheem Graham's plants located in Rio de Janeiro, São Paulo and Santos. Each plant runs proprietary blow molding machines manufactured by Graham Engineering Corp.
The new firm expects to continue serving Rheem Graham's major customers, including Petro- bras, Mobil, Bayer, BASF and Dow, as well as expand with new customers. Most of the HDPE bottles produced are used in the domestic Brazilian market although the company exports elsewhere in South America. Graham Packaging do Brasil serves the automotive lubricant, household, personal-care and food industries.
This is not Graham Packaging's first move in Latin America. Last year, when the firm formed a joint venture with blow molder Lido Plast in Argentina, Phil Yates, president and chief operating officer of Graham Packaging Americas, said South America ``is an important developing market of consumer products companies.''