Scandinavia's top producer of industrial polyethylene packaging, Trioplast Industrier AB, is acquiring the regional polyethylene film and converting operations of Denmark's Nyborg Plast International A/S.
Trioplast of SmÃ¥landsstenar, Sweden, and Nyborg Plast of Nyborg, Denmark, have signed a letter of intent, and the deal is scheduled to be completed by the end of June. Terms were not disclosed.
The deal involves the Nyborg Plast A/S industrial film extrusion, trash-bag and big-bag plant at Nyborg, a small industrial and construction film plant at Fjugesta, Sweden, and sales offices in Sweden and Norway.
However, the Trioplast acquisition does not include Nyborg Plast International's French PE film and packaging subsidiaries, Silvallac SA of Alsace and SMS SA of Bretagne, which specializes in films for the agricultural and forestry sectors, and trading company Promosac.
Nyborg Plast has been squeezed by fluctuating raw material prices, slow market growth and overcapacity in the sector. Last year it invested heavily to improve profitability, including installing advanced multilayer extrusion equipment, according to its parent FLS Industries A/S of Copenhagen, Denmark.
In January 1996, Nyborg Plast disposed of a poorly performing United Kingdom plastics subsidiary, IPEL Ltd., a producer of polypropylene products, in a management buyout. FLS said that it was outside Nyborg's main business focus.
In addition, Nyborg Plast has been trying unsuccessfully for some time to sell its French film and industrial packaging companies, according to Ole Trolle, Nyborg Plast International chairman and FLS executive vice president.
The Danish acquisition will take Trioplast's film volume from around 265 million pounds per year to 353 million pounds per year, and raise its annual sales to 2.1 billion Swedish kronor ($271 million).
Trioplast, a leading European producer of packaging and hygiene film, said the deal will expand its product range and make it more competitive as a PE packaging producer.
FLS, an engineering, aerospace and building materials conglomerate, also announced that Nyborg Plast International is changing its name to FLS Plast A/S.