Boxmore International plc, the fast-expanding packaging group in Northern Ireland, is keen to strengthen its base in mainland Europe through acquisition or by building new plants.
But, according to its young Chief Executive Officer Mark Ennis, the Lisburn firm will bide its time in the PET bottle market, in view of serious European overcapacity and a likely bloodbath in this sector in the next year.
``We are going to sit tight and batten down the hatches during 1998,'' he said, adding that in 1999 or 2000 there should be some attractive takeover opportunities in Europe.
Meanwhile, Boxmore intends to capitalize on its entry to Europe's pharmaceutical and health-care packaging market.
Boxmore reported 1997 pre-tax profit up 17.7 percent to £16.8 million ($28 million) despite the effect of the strong pound sterling. Sales rose 13.9 percent to £100.7 million ($168 million).
Sales in Boxmore's food and drink container division rose 15.2 percent to $54 million, despite volatile resin prices and the translation effects of income from its Irish and South African bottle operations.
Boxmore increased its ownership in its South African PET bottle molding joint venture at Harrismith to 70 percent and saw its share of that market soar 220 percent in 1997. It expects more growth as half-liter bottles take off in that country.
Boxmore plans to spend almost $17 million in the division in 1998, including unspecified investments in the South African and Irish plants.
The company also is investing about $15 million in production of high-value-added products including large industrial containers, Ennis said.
In its chemical and industrial division, where Boxmore blow molds fluorinated polyethylene containers, the firm is set to operate its newly completed plant in Kunshan, China, near Shanghai. The joint venture operation with Rotam Group will start production by March 31.
The venture is facing an early challenge, Ennis said: It must find new local Chinese and export customers since several expected multinational clients are not in place yet in China.
Elsewhere in the division, Boxmore suffered from the adverse effects of Britain's strong currency. Although sales at its French industrial container plant at St. Etienne rose a healthy 25 percent last year, conversion from the franc reduced divisional growth from 11.3 percent to just 3.9 percent.