Jefferson Smurfit Group plc has all but pulled out of plastics packaging worldwide with the US$8.4 million sale of its Mexican blow molding division to Owens-Illinois Inc.
In November, Dublin, Ireland-based Smurfit sold its strong position in the U.S. plastic drum market to Russell-Stanley Corp. of Red Bank, N.J.
In the past three years, Smurfit also sold off its polyethylene film extruding and bag converting plants in the United Kingdom and Ireland to British Polythene Industries plc of Greenock, Scotland.
Now Smurfit retains only a small plastic bag-making unit at Palmira, Colombia, said Tony Kerry, corporate planner.
Toledo, Ohio-based Owens-Illinois plans to expand production of PET bottles at the former Smurfit blow molding plants in Mexico's Guanajuato state.
The Mexican plastics division, run by the Irish group's paperboard and box converting subsidiary Smurfit Carton y Papel de Mexico SA de CV, makes PVC high density PE and PET bottles for the food, pharmaceutical, personal-care and household chemical sectors.
It operates nearly 40 extrusion blow molding, injection blow molding and three-layer coextrusion machines, chiefly Krupp Kautex, Bekum and Nissei machines, at three plants. They include the Atlas and Naucalpan units close to Mexico City, and a newer, US$10 million unit at San Jose Iturbide.
In 1995, Smurfit Carton y Papel had total sales of US$242 million, with blow molding accounting for about US$16 million. The company has been carrying out an upgrading and modernizing program at its plastics division in recent years.
Smurfit took over the plastics division in Mexico in 1989, when it acquired Container Corp. of America's forestry, paper mill and packaging offshoots in Colombia, Venezuela and Mexico.
Owens-Illinois subsidiary Owens-Brockway Plastics Products plans to spend as much as US$10 million to expand Smurfit's 10,000-square-foot Guanajuato plant in two to three years, according to a spokesman.
The company has acquired land surrounding the plant to allow for additional PET bottle manufacturing, he said.
Smurfit Carton y Papel, a leading Mexican custom blow molder, has been locked in tight competition to serve key multinationals like Colgate-Palmolive and Procter & Gamble Co. Chief among its opponents has been Owens-Brockway's Mexico City-based joint venture, Regioplast SA de CV.
Owens-Brockway formed Regioplast in 1993 with its local glass packaging licensee Grupo Vitro SA.
Smurfit officials in Dublin said the sale of the plastics operation reflects its decision to focus on its core business of paper and paper-based packaging.