LONDON — Brussels, Belgium-based UCB SA last week bought three oriented polypropylene film operations to nearly double its sales and production capacity in the market.
UCB bought OPP film plants in Dumfries, Scotland, and Gent, Belgium, from London-based Imperial Chemical Industries plc and another plant in Melbourne, Australia, from Orica Ltd., formerly ICI Australia.
UCB spokesman Alain Douxchamps said the purchases will increase the company's OPP film production to 176.3 million pounds, making it the seventh-largest producer in the world. Including cellulose films, UCB's total film capacity will reach nearly 308.6 million pounds per year with the new purchases.
The three plants have combined sales of £50 million ($82.5 million) and produce about 55 million to 66 million pounds of OPP film annually, Douxchamps said. Both ICI and UCB spokesmen declined to disclose the price paid for the loss-making plants in Dumfries and Gent.
The deal marks ICI's departure from the OPP film market. According to ICI spokesman John Edgar, OPP film constituted a small portion of the total divestitures ICI has made since purchasing Unilever's specialty chemical division for £4.8 billion ($7.9 billion) in July.
ICI has divested businesses with £3.5 billion ($5.8 billion) in sales so far, in line with the company's long-term strategy to move from a broad-based to a specialty chemicals company.
Previous divestitures include other plastics-related businesses. On Feb. 2, ICI finalized the sale of its PET resin and film units to DuPont Co. of Wilmington, Del.
UCB's film sector constitutes about 20 percent of the Belgian company's business, with projected sales of 17 billion Belgian francs ($456 million) in 1998, Douxchamps said.
By shifting from food packaging to mainly specialty films, the company has managed to increase sales 40 percent, according to the 1996 annual report. In 1996, UCB sold its flexible packaging division to Melbourne-based packaging firm Amcor Ltd.
In the competitive OPP film market, UCB focuses 70 percent of its business on specialty products like self-adhesive labels, security films and coded films, recently developing film for bank notes on polymer substrate, Douxchamps said.
UCB will continue to produce its self-adhesive labels in the United Kingdom for the U.S. market, he said. The labels have a range of potential applications for food and drink products, household items, and automotive and cosmetics markets.
UCB plans to use the Belgian and Scottish plants to make new specialty films, Douxchamps said.
``It's an important purchase for us,'' he said. ``ICI has good technology. We bought the plants to reinforce and develop our OPP film business.''
While the entire business and assets of the Gent operation will be transferred to UCB, the Belgian company will maintain only one of the two Dumfries plants, Edgar said. The more modern OPP film plant will be transferred to UCB, but ICI will retain the older plant. The older plant, which dates back to the early 1960s, will continue to produce for UCB until the middle of the year before closing down, Edgar said.
UCB started construction last year on an OPP film plant in Melbourne to respond to the growing demand for specialty films in the Asia-Pacific market, according to a company statement. UCB plans to begin operations at the plant in August. The company has not made a decision, however, as to how it will coordinate the recently purchased Melbourne plant with the new facility, Douxchamps said.