US Plastic Lumber Corp. has acquired all the assets of Chesapeake Plastic Lumber in Denton, Md., a privately held firm that began production 11/2 years ago.
Chesapeake uses a continuous extrusion process to mold lumber profiles and decking boards that come in 10 colors and the same sizes as treated lumber. It runs two lines using unwashed, post-consumer natural high density polyethylene. The firm employs between seven and 10.
US Plastic Lumber did not disclose terms of the cash and stock deal. But it plans to keep Chesapeake's equipment, management and staff in place.
With its 12 acquisitions made since December 1996, US Plastic Lumber estimates 1998 sales will top $55 million, with plastic lumber making up 30-50 percent of that total, said F. John Long, vice president of sales and marketing. Its other business includes soil remediation. The firm expects overall operating profit of more than $8 million this year.
The Boca Raton, Fla., firm claims to have the largest U.S. capacity to produce structural and nonstructural plastic lumber profiles.
The Akron, Ohio-based Plastic Lumber Trade Association estimates the U.S. market for all-plastic lumber at $40 million to $60 million a year. But Long pegs the U.S. sales potential for plastic lumber at $100 million, with plastic-wood composites adding another $100 million to that total.
Bruce Rosetto, general counsel for US Plastic Lumber, said Chesapeake approached the former's Earth Care plastic lumber division several months ago.
``The firm brings additional capacity, it has the ability to grow and add equipment, it is in a good location and we were impressed with the management and technical experience of [Chesapeake President] Richard Wolf,'' Rosetto said in a telephone interview.
Mark Alsentzer, chairman and president of US Plastic Lumber, said his firm hopes to capture a substantial piece of the $4 billion pressure-treated lumber market in the next five years.