Schmalbach-Lubeca AG enhanced its Latin American market share by acquiring a SÃo Paulo, Brazil-based PET bottle manufacturer for about $52.5 million.
Rhodia-ster SA sold its PET packaging division, Braspet Industria e Comercio de Embalagens Pl sticas Ltda., earlier this month. Braspet operates three blow molding plants, two in Sao Paulo and one in Pocos de Caldas, and employs 390. In addition, it has seven in-house production lines installed at soft drink and edible oil manufacturing companies.
``Brazil is the world's third-largest market for carbonated soft drinks,'' Hanno Fiedler, Schmalbach-Lubeca board chairman and chief executive officer, said in a news release.
Ratingen, Germany-based Schmalbach-Lubeca made its big move into the global PET bottle market a year ago when it bought Johnson Controls Inc.'s Plastics Container Division. This deal strengthens the PET business, which Fiedler described as a core division in the company's portfolio, and will have a positive effect on the group's earnings power.
Braspet was founded in 1990 and is the only Brazilian company that supplies refillable PET soft drink bottles.
Its production facilities have a capacity of 630 million preforms and 700 million bottles annually. The firm uses single- and double-stage equipment with molds ranging from 36-96 cavities.
Braspet holds about 15 percent of the Brazilian market for PET packaging, making it the third-largest local supplier, said Valter Faria, Rhodia-ster's investor relations manager. It expects to have 1997 sales around $66 million.
``Braspet was founded in order to help introduce PET packaging in Brazil, develop the market and stimulate resin consumption,'' he added. ``The company has accomplished its goal, becoming an important player in its segment and presenting a growth potential beyond Rhodia-ster's interests.''
Rhodia-ster claims to be the largest PET resin producer in South America with an annual capacity of 396.8 million pounds. Since Braspet competes directly with Rhodia-ster's PET resin customers, the Sao Paulo-based company decided to focus its activities in the production of PET resin and polyester fibers. It recently sold its polyester nonwoven products business to the British BBA Group plc.
Schmalbach-Lubeca expects the market for PET containers, specifically refillable bottles, to grow 25 percent before the year 2000. With a population of 155 million, Brazil's potential consumer buying power is about $700 billion, the company said.
``Proposals from two other PET packaging players were thoroughly analyzed, but the Schmalbach-Lubeca offer was considered the most interesting in terms of price and business development potential,'' Faria said.
He added that the deal was the result of almost an entire year of negotiations.
Schmalbach-Lubeca already has a partnership with bottle and beverage cap maker Tapon Corona Metal Plastico Ltda. of Louveira, near Sao Paulo. The Braspet buy raises Schmalbach-Lubeca's share of the Brazilian PET bottle market from 7 to 20 percent, or No. 2 in Brazil. The firm also claims the No. 1 spot in PET bottle production worldwide.
Plastics News Sao Paulo-based correspondent Sandra Mara Costa contributed to this story.