AEP Industries Inc., a leading film and sheet extruder, has acquired the product line of Citibag Inc., a Newark, N.J.-based bag manufacturer that went bankrupt earlier this year.
AEP expects Citibag's super-hexene metallocene LDPE film to fit in nicely with the company's existing low density, high density and reprocessed polyethylene film lines.
``Citibag had built up a reputation for making a high-quality bag,'' Jeff Melius, AEP can liner division manager, said in a recent telephone interview. ``It's a really high-strength bag.''
South Hackensack, N.J.-based AEP will retain the Citibag name and also has hired Citibag founder Michael Dimin. AEP will use Citibag's technology to make bags from HDPE, linear LDPE and recycled resins.
Citibag moved to Newark from New York in 1989, using a loan from the New Jersey Economic Development Authority to complete a $2.5 million renovation at that time.
Citibag posted sales of more than $7 million in 1991, the last year for which Plastics News has data on the company. Its bags are used in specialized industrial applications in hospitals, schools and offices.
Citibag's equipment and property in Newark now belong to a local bank. Melius was unsure if AEP would hire any of Citibag's 50 employees. He added AEP would not have to purchase any new equipment to produce Citibag's products at eight AEP locations in North America.
Citibag's bankruptcy had nothing to do with the quality of its products, according to Melius.
``Citibag's problem was that they only had one product line, but we can mix it in with other products,'' Melius said. ``They were too small to try to compete with everyone else. Our goal now is to build up new business for these products.''
Melius added that although AEP has produced metallocene films for several years, Citibag's technology will allow the company to offer a full line of metallocene products for the first time.
Dimin was unavailable for comment, but said he approved of the arrangement in a statement released Dec. 30.
AEP was 16th in Plastics News' 1997 ranking of North American film and sheet manufacturers with $260 million in sales for the 1996 fiscal year.
That amount represents an increase of almost 7 percent from the 1995 fiscal year.