AEP Industries of South Hackensack, N.J., has expanded its film holdings and entered the plastic cutlery field through an agreement with Amcel Corp. of Watertown, Mass.
AEP, which claims to hold more than 20 percent of North American stretch film capacity, now will have access to food bags, can liners and cutlery produced at Amcel's Louisville, Ky., facility. Amcel, a privately held company in its 53rd year of operation, will continue to operate its office in Watertown.
Amcel also is adding three extrusion lines and two injection molding lines to the 26-line Louisville site. That expansion, partially funded by AEP, will add 15 jobs and be completed in the first quarter.
Amcel officials said the company ranks in the top 10 of U.S. plastic cutlery manufacturers, with about $7 million in annual sales.
``So many customers that we sell stretch film to also buy cutlery and food bags and trash bags,'' said John Powers, AEP executive vice president. ``Now we can go to large, nationwide accounts and say they can have all of these products from one salesman, one truck and one invoice.''
This strategy already has helped AEP land such national accounts as Kraft Foods and DuPont Co.'s stretch film contract, according to Powers.
Amcel President Brad Gordon said the agreement ``guarantees Amcel can play with the big boys.''
``This gives us national sales power and creates a very strong team,'' said Gordon.
Officials at both companies stressed that the agreement is a ``strategic alliance'' and not an acquisition.
``We've been approached by a number of companies in the last six months, but we have no interest in selling,'' Gordon said.
The agreement also is expected to help Amcel rebound from a sales slump that resulted from a price-fixing investigation involving Amcel Chief Executive Officer Lloyd Gordon, Brad Gordon's father.
Lloyd Gordon was convicted of the charge, which centered around plastic cutlery prices, in a Philadelphia federal court in July, but is appealing the conviction.
The investigation affected Amcel's film sales, which dropped from $49.1 million in 1996 to $37.4 million last year.
``The litigation hurt us quite a bit,'' Brad Gordon said. ``Luckily we've been around so long that we had a lot of customers stick with us.''
``The newer business was hardest to hold onto, though,'' he added. ``People heard rumors and believed what they read.''
``A lot of customers questioned what was going on with Amcel and that led to a drop in sales,'' Powers said. ``But we feel we can get those sales back very quickly.''
The partnership particularly will target business Amcel lost when it sold its Emeryville, Calif., plant to a subsidiary of Sigma Plastics Group in 1994. As part of that sale, Amcel agreed not to approach its former customers for three years. That limitation is no longer in effect.
AEP officials said they have no plans to reopen Amcel's Edison, N.J., plant, which was closed last summer when Amcel decided to operate solely from Louisville. Customers of the Edison plant will be served from AEP's Mountaintop, Pa., plant.
AEP posted sales of $463 million in North America in 1997. The addition of Amcel's products will boost it to more than $500 million in annual sales, which could place it among the top 10 North American film and sheet manufacturers.