Consumers Packaging Inc. plans to re-enter the plastic container market after exiting it four years ago to focus on glass.
The Toronto firm said Sept. 29 it signed a letter of intent to acquire a controlling interest in Pet-Pak Containers, a PET bottle producer based in Mississauga, Ontario. Pet-Pak has capacity to make more than 250 million containers annually. It logged sales of US$15.4 million last year, up from US$12 million in 1995.
Officials did not disclose sales this year but gave indications they will be substantially higher than in 1996. The 150-employee firm processed about 10 million pounds of PET in 1996.
Pet-Pak specializes in highly engineered PET containers for liquor, beverage, pharmaceutical, food, health-care and cosmetic markets. Pet-Pak President Robert Megna said the firm recently won major contracts in liquor markets and now counts Bacardi-Martini Canada Inc. and Hiram Walker Distilleries among its big customers.
Pet-Pak and Consumers Packaging sell to many of the same customers, many of which are switching from glass to PET. Pet-Pak's work with polyethylene naphthalate/ PET beer containers may be especially attractive to Consumers Packaging since glass beer bottles are a big part of its business.
Earlier this year Pet-Pak unveiled a PEN beer container it developed with ICI Polyester of Wilmington, Del., which supplies Kalidar PEN resin for the application. Megna said Pet-Pak since has added several more PEN beer bottle designs for testing in the U.S. market.
``The opportunities of having an overall company investing in both glass containers and PET plastic containers is tremendous in terms of servicing our customer requirements in all industry segments,'' John Ghaznavi, Consumers Packaging chairman and chief executive officer, said in a news release. Megna stated in the release. Megna stated in the release that Pet-Pak's management will continue in the business with a focus on growth.
He said his firm is profitable and agreed to the takeover because its capital requirements are growing rapidly. Pet-Pak competes against large international firms and wants to set up more North American, and possibly offshore, plants. It opened its second blow molding plant in Mississauga early this year and has spent about C$5 million (US$3.63 million) on expansion in 1997. Megna said his firm is setting up a third plant in Mississauga, to injection mold preforms, beginning in the first quarter of 1998. It will install five Husky injection presses there. Pet-Pak has been sourcing preforms from undisclosed molders.
Pet-Pak operates 16 blow molders and has been expanding capacity with advanced Sidel machines, Megna said. It also uses Mag and Dynaplast machines.
Consumers Packaging claimed it is North America's only ISO 9001-certified glass container company. It also said it is the third-largest glass container producer on the continent following its acquisition last year of Anchor Glass Container Corp. of Tampa, Fla. Officials predicted the Anchor purchase will help it double sales this year from the C$462.3 million (US$335.2 million) it recorded in 1996.
Ghaznavi stated after Consumers Packaging's annual meeting in June that the firm wanted to get into plastic containers this year. It had extensive plastics operations but sold them to help reduce debt and focus on glass.
Consumers Packaging sold Plax Inc., one of Canada's largest container blow molders, to Graham Packaging Co. of York, Pa., in 1993. That year it also sold its Portion Packaging thermoforming unit to Winpak Ltd. of Winnipeg, Manitoba. In 1992 Plax sold its closures business to a management group that renamed the Waterloo, Quebec, operation MAC Closures Inc.
Megna said the firms hope to finalize the deal by mid-October.