Sigma Plastics Group has expanded its plastic bag business by acquiring stakes in two Chicago plastic bag operations.
The Lyndhurst, N.J., flexible packaging major bought the 50 percent stake of Aargus Plastics Inc. formerly held by investment group Starr-Cohen. Jerome Starr retains a half-interest in Aargus and will continue as the firm's president and co-chief executive officer. Alfred Teo, became chairman and co-CEO of Aargus.
In a separate deal done June 12, Teo and Eugene Wisniewski bought the assets of Polystar Films LLC after its bank, LaSalle National Bank of Chicago, foreclosed on the firm. The partners created Bio Star Films LLC to operate the assets as an extruder, printer and converter of PE bags for laundry and retail markets.
Aargus has about 25 extrusion lines with annual capacity of about 25 million pounds, Teo estimated in a telephone interview. Bio Star's 15 lines can extrude 20 million pounds a year. Teo said he and his partners are reorganizing the two businesses but he did not know if they will be merged into Aargus.
Aargus has been in business for more than 30 years, 27 of them under Starr as president and CEO, and recorded sales of about $16 million last year.
Polystar's recent history has been unstable. Its assets formerly were held by Midwest Film Corp., which went bankrupt in the fall of 1996. Starr-Cohen formed Polystar to buy the assets. Polystar's bank took possession of the assets the week of June 5 under the uniform commercial code after Polystar defaulted on a loan. Teo said it had been running well below capacity before the default.
Wisniewski, president and chief operating officer of Bio Star, is a turnaround specialist from the steel industry who bought plastic bag producer Bio Industries of Chicago in 1992. Teo is chairman and CEO of Bio Star and Starr is its executive vice president.
The deals were made about two months after Sigma announced other expansions. Its Epsilon Polyolefin Corp. subsidiary recently entered the European shrink film market by forming a joint venture with IPEL Ltd. of Liverpool, England. At about the same time, Sigma Stretch Film announced that it had opened its fourth plant, a 35 million-pound-per-year operation in Tulsa, Okla.
Sigma said its annualized sales level exceeded $765 million before the Chicago acquisitions.