LONDON — Scottish packaging and materials company Low & Bonar plc is considering buying two or three more businesses in the next six months, according to its finance director, Norman McLeod.
The purchases may include one or two rotational molding firms and a polypropylene fiber and floor covering company, he said in a telephone interview.
The Dundee, Scotland, company already has invested about £49 million ($79 million) in takeovers in the past 10 months, but McLeod confirmed that the company has about £70 million ($113 million) to spend in coming months.
L&B, which also produces paper-based packaging, has continued a strategy of rebalancing its business in favor of plastics and specialty materials with new acquisitions in continental Europe.
The company, the parent of U.S. plastics company Bonar Inc., has extended its European rotational molding spread with a £5 million ($8 million) purchase of Spanish rotomolder Rotec Plastics SA of Gav and A/S Metas of Smoerum, Denmark.
In addition, L&B has expanded the specialty materials division with its $24 million acquisition of polypropylene fabric manufacturer UCO Technical Fabrics of Lokeren, Belgium. This plant is close to the company's own units and has allowed it to rationalize its facilities. UCO also adds strength in the area of geotextile material for road and construction applications, McLeod said.
L&B also just announced its $18 million acquisition of Nuway Manufacturing Ltd., a maker of rubber and metal high-traffic entrance mats for airports, hotels or hospitals, from the giant United Kingdom industrial conglomerate BTR plc. L&B already makes textile matting at its Dutch offshoot Royal Tufton.
``The packaging market worldwide is particularly difficult at the moment with great pressures on margins,'' McLeod was quoted by Scottish newspaper the Scotsman as saying. ``The acquisitions we have made are in areas where we expect to make double-digit margins.''
The newly acquired Spanish and Danish rotomolding companies produce large containers for bulk transit of chemicals and frozen foods.
Together, they add sales of about $9.6 million to L&B's own rotomolding operations, which include plants in Britain, Germany, France, the Netherlands and North America. Its products include large containers and molded parts for off-road construction and other heavy vehicles. Because of the cost of transporting large, air-filled plastic containers longer distances, L&B has been acquiring quality molding firms in different parts of the region to serve customers locally, McLeod said.
The Scottish group recently approved a $3.22 million capital investment to expand capacity at its German and United Kingdom rotomolding plants with the addition of new machinery.
The rapidly expanding rotomolding business has total sales of about $113 million with the addition of the two new European businesses, McLeod said.
In the United States, L&B is committed to spending roughly $3 million to expand PP fiber and yarn production at its plant in Williamston, S.C., during the next year.
The unit, acquired two years ago, supplies material for carpet backing and slings.