Nearly a year ago, Owens-Illinois Inc. bought BTR plc's packaging businesses, including Continental PET Technologies Inc., and things have gone better than expected.
While the $3.6 billion deal included BTR's plastic and glass packaging operations, the plastic side, particularly BTR's Florence, Ky., Continental PET Technologies Inc.'s technological advancements, has generated the most interest for the beer industry.
Growth for O-I's plastics business has been 10 percent or better — faster than management had expected, said Eric Bosshard, senior research analyst partner at Midwest Research in Cleveland. As a bonus, the technological progress has been better than O-I expected, especially in the area of plastic beer bottles.
``The important thing about the acquisition of Continental PET Technologies is that it has been confirmed as a good deal,'' said Peter Weggeman, president of Directions 21 Inc. ``O-I is emerging as the pre-eminent leader in technology for multilayer plastic beer bottles.''
Although he qualified that by saying that beer bottle technology is still very much in the developmental stage, O-I's technology is leading the pack.
The acquired technology benefits O-I in other ways, Bosshard explained. ``If beer does make the switch from glass to plastic, O-I is in a safe position,'' he said. ``They would lose some glass, but have the plastic to pick it up.''
The purchase nearly doubled Owens-Brockway Plastic Products' North American blow molding sales to $1 billion, making it the largest blow molder in the region. Owens-Brockway is the blow molding unit of O-I.
``O-I has always been a good player in plastics with cosmetics and detergent,'' Bosshard said. ``This acquisition moves the company more into food and gives it a broader portfolio. They've become a dominant force in the business.
``Management identified a real attractive acquisition and things have gone better than expected,'' he added.
In addition, the deal gave O-I its first international plastics operations, with plants in Australia, New Zealand, China, Brazil, Mexico, the United Kingdom, the Netherlands, Hungary and Saudi Arabia.
Also part of the sale is BTR's ACI subsidiary, based in Melbourne, Australia. O-I is a manufacturer of glass and plastic containers, plastic closures, plastic description containers, labels and multipack plastic beverage containers.