Closures and Packaging Services Ltd., a small company in the United Kingdom, has concluded a license agreement under which its patented, one-piece polyethylene closures will be supplied to Coca-Cola in Japan.
The deal with Japanese joint venture partners Altech Co. Ltd. of Tokyo and Toppan Printing Co. of Kobe, involves an initial order for six systems with the capacity to produce more than 1 billion of the ``outside deformable seal'' bottle caps a year.
A new plant at Kobe will be equipped initially with six 310-ton Krauss-Maffei injection molding presses using molds from AWM of Muri, Switzerland, said Simon Weller, Caps finance director.
He estimated that it will cost about $30 million to establish the Japanese plant, which should be operating by the end of this year.
Altech will contribute widespread injection molding experience to the venture. It has been supplying preforms and bottles to Coca-Cola in Japan, and formerly manufactured Krauss-Maffei equipment for the local market. Toppan is a specialist in printing on plastics, Weller said.
Caps, based in Moreton-in-Marsh, England, was formed in October last year by Australian Rod Druitt, who invented the one-piece, high density PE ODS closure for beverage bottles.
Druitt, a food technologist with packaging experience, wanted to develop a simple, single-piece closure to replace the current two-piece versions used for hot-fill or carbonated-beverage bottle applications. He managed to develop a method of wrapping the cap around the bottle neck where it deforms to seal.
PE was preferred for the closure over polypropylene because PP cracks, Weller said.
The inventor originally began developing and introducing his closure abroad through a 50-50 partnership with U.S. aerosol valve producer Precision Valve Inc. of Yonkers, N.Y.
But, Druitt wanted greater worldwide exposure for the closure and joined with British venture capital firm 3i, which bought out Precision's share, to form Caps, said Weller, also an Australian.
Caps has had to contend with widely held international reservations about one-piece plastic closures despite its advanced technology, Weller admitted.
However, Druitt already has achieved some international success for his ODS closure, which is being used for beverages in Australia, China, Mexico, Brazil and Europe. In China alone, 2 billion of the one-piece caps are produced annually, and the firm holds more than a 50 percent share of Coca-Cola's closure market there, Weller said.
Caps, with a registered office in Guernsey, in England's Channel Islands, is focusing on the role of a service and support company for its increasing number of licensees worldwide. It now employs four engineers based in the United Kingdom, Weller said.
Caps plans to achieve a significant global share for its closure. Given a global market of 55 billion to 60 billion closures for 1-inch-neck soft drink bottles, Weller said, his firm is hopeful it can capture a 15-20 percent share of this by 2000.
Weller claims that the closure has been well-received by global majors Coca-Cola and Pepsi-Cola, but their empires abroad are fragmented through separate bottling firms, meaning that Caps has to sell its concept more locally.
Caps is looking at promoting the ODS cap production using compression molding technology in place of injection molding in some prospective markets. There is a cost advantage in such a switch, which might be suitable in regions like Eastern Europe and South America, Weller said.