Leading Edge Packaging Inc. acquired its sole manufacturing supplier in a complex stock transaction aimed at boosting production control, investor interest and European market access.
Leading Edge's majority stockholder, Chung Hwa Development Holdings Ltd. of Hong Kong, exchanged 2.25 million new Leading Edge shares valued at $6 each for Justrite Investments Ltd. and its manufacturing subsidiary Rich City International Packaging Ltd. Until the deal closed March 12, Leading Edge in New York was the Chinese packaging maker's North American distributor.
Rich City, renamed Leading Edge Packaging Ltd. on March 9, employs 3,000 at two joint venture plants in Dongguang, China.
The operation makes molds and operates 32 small Taiwanese and Chinese injection molding presses, mainly processing polypropylene and high density polyethylene, said Casey K. Tjang, Leading Edge chief financial officer and secretary. The plant also uses polyurethane, metal, wood and paper.
The plants make packaging for jewelry, watches and optics, and premiums for high-profile brands, primarily in North America, with a smaller portion in Europe. In a telephone interview, Tjang forecast sales of more than $19 million for the fiscal year ending March 31, 1999.
Leading Edge reported profit of $956,000 on sales of $9 million for the nine months ended Dec. 31.
Leading Edge employs seven at a 2,000-square-foot office, and showroom in New York and another 18 at a 65,000-square-foot office and warehouse in Edison, N.J.
With its additional shares, Chung Hwa owns 74 percent of Leading Edge.