SAO PAULO, BRAZIL — Dixie Toga SA's decision to sell a one-third stake to Bemis Co. Inc. meant cutting off ties with another U.S. film converter: Bryce Corp. Inc. of Memphis, Tenn.
Sao Paulo-based Dixie Toga picked Minneapolis-based Bemis because it will provide leading-edge technology to compete in the South American film market, officials said.
``In spite of the previous relationship, we did not contemplate Bryce in this new association because it wouldn't add that much value,'' said Dixie Toga's partner, Sergio Haberfeld.
Dixie Toga expects to report $550 million to $600 million in 1998 sales, significantly larger than privately held Bryce, Haberfeld said.
The deal with Bemis ``adds to our business state-of-the-art technology in coextrusion and co-lamination and is an opportunity to capitalize the company to keep its leadership position in the South American market, somewhat closing the door on other competitors,'' he said.
It also opens up the option to import specialty films from U.S. Bemis plants, including barrier films for meat and dairy products whose consumption volumes do not justify local production, he said.
The deal, which closed Feb. 12, has Bemis paying $38.5 million for the one-third interest, plus another $24.5 million in three years, depending on Dixie Toga's sales and profit levels.
Prior to closing the deal with Bemis, Dixie Toga reorganized some of its business activities:
Three months ago the company bought out its partners in BMT Ltda., a SÃo Paulo-based manufacturer of films for snacks and diapers. Dixie Toga and the two former partners, Bryce Corp. and Mildenberger & Willing GmbH of Gronau, Germany, each had held a one-third stake in BMT.
Then two months ago, Dixie Toga sold a 6 percent stake it had held in Bryce back to the Memphis firm.
The Bemis deal creates a new joint venture company, called Itap/Bemis Ltda. The venture has five plants: three in Sao Paulo state and two in Paran state.
The new firm is capable of producing films with as many as five layers and is equipped with flexographic and rotographic printing machines.