Foam, plastics and fiber firm British Vita plc announced a number of acquisitions in the United States and Europe in its quest for new products and more-profitable growth.
In addition, the firm is entering the Chinese market. It is in the final stages of setting up a joint venture with its long-time Japanese partner, Inoac Corp., to serve international customers with operations in China.
Manchester, England-based Vita is buying specialty plastic foam producer Crest Foam Industries Inc. of Moonachie, N.J., for about $11 million. Crest Foam owner Donald Bellew said the deal will be finalized at the end of September.
Crest has annual sales of about $15 million. It produces reticulated foams used for filtration, sound insulation and absorption. It serves sectors including automotive, electronics, household goods, and water treatment. The firm has fewer than 100 employees, although Vita hopes to expand the operation, Bellew said.
The deal will expand British Vita's involvement in the U.S. industrial products market, said finance director Calvin O'Connor.
British Vita already has interests in the United States, including a 30 percent stake in Spartech Corp. of Clayton, Mo., a supplier of plastic sheet, compounds and injection molded components.
British Vita announced the acquisitions when it released its financial results for the six months ended June 30. It reported a 21 percent rise in pre-tax profit to $50.8 million for the period, despite a drop in sales from $758 million to $661 million.
In Britain, the group's industrial sector has moved into color compounding with its July takeover of color masterbatch company Silvergate Plastics Ltd. of Wrexham, Wales. The purchase price was not disclosed. Silvergate's annual sales are about $9.5 million, O'Connor said.
Vita's cellular foams division has continued the group's expansion into Eastern Europe by setting up a unit in Alytus, Lithuania. It will produce foam for the region's growing furniture and bedding sectors, O'Connor said.
British Vita also has Polish foam subsidiaries in Brezg Dolny and Lublin. It serves the domestic market, Germany and parts of Eastern Europe.
The Alytus business, Vita Baltic International, is designed to supply growing markets in the northern portion of Eastern Europe, he added.
The Alytus business, which is now 80 percent owned by British Vita, has annual sales of almost $16 million, said O'Connor.
British Vita has had a partnership with Inoac of Nagoya, Japan, for more than 20 years, and Vita Inoac has operated a joint holding company in Singapore to seek out potential joint venture projects throughout Asia.
O'Connor said the venture in Shanghai, China, is designed as the first step into the rapidly growing Chinese market and the start of a long-term investment in China. The venture is owned 40 percent each by Vita and Inoac, the rest is held by a local partner.
The venture is a response to calls from Tier 1 automotive suppliers already in China, including Lear Corp. and Johnson Controls Inc., for Vita to manufacture alongside them, according to O'Connor.
He added that the plant is developing automotive foam and adhesive products, and sees opportunities there for Vita's liquid polymer compounds, which already are produced in Australia.
Back in Europe, British Vita invested nearly $4 million in August to add capacity to plastic sheet affiliates Royalite Plastics srl of Vittuone, Italy, and Metzeler Plastics GmbH of Kirchberg, Germany.
The Italian business has annual sales of about $32 million; the German business $39.8 million.
Plastics News editorial intern Christina Stehno contributed to this story.