Free-Flow Packaging International Inc. has acquired a longtime licensee that is considered the United Kingdom's largest manufacturer of polystyrene loose-fill packaging. Redwood City, Calif.-based Free-Flow on Feb. 11 purchased Flo-Pak (UK) Ltd. from Macfarlane Group plc of Glasgow, Scotland, for 3.8 million ($6.2 million). The Brackley, England-based operation will become a subsidiary of a Free-Flow holding company in the Netherlands.
"Flo-Pak (UK) has been under strategic review since September," said Macfarlane Chief Executive Officer Iain Duffin, via e-mail. "It did not readily fit with our main divisions and priorities [and] will be far better served belonging to a specialist global loose-fill manufacturer."
Macfarlane manufactures and distributes packaging, industrial film and specialty printed materials.
Macfarlane reported a gain of 500,000 ($804,000) on the sale of Flo-Pak (U.K.), which has 3.1 million ($5 million) in assets.
Peter Connor, managing director of the U.K. business since 1980, is to continue in his position.
The U.K. licensing arrangement was established in 1975, said Dennis Fernandez, Free-Flow vice president for finance and international operations, in a telephone interview.
The operation employs 42 and manufactures Free-Flow's Flo-Pak-brand loose-fill packaging and Ultrawood wood substitute made from waste PS. The profitable operation occupies a 51,000-square-foot plant in Brackley and had 1999 sales of about 3.3 million ($5.4 million).
New manufacturing contracts for third-party loose-fill may propel the operation to 2000 sales of 4 million ($6.5 million), Fernandez said. In addition, Free-Flow will expand its air-cushioning product line and equipment there.
The country's environmental agency accredits the Brackley plant as a packaging-waste reprocessor. The site is regarded as the U.K.'s largest collector and recycler of expanded PS — about 3 million pounds per year of mostly scrap material. That figure has been as high as 4 million pounds per year, and the company plans to boost throughput, Fernandez said.
Free-Flow also will send recycled PS to other operations in Villiers-le-Bel, France; Herbrechtingen, Germany; and Heerlen, the Netherlands.
Including the U.K. operation, Free-Flow projects 2000 sales of more than $75 million from a range of protective packaging products and dispensing systems.
Free-Flow's domestic manufacturing occurs in Redwood City and Commerce, Calif.; Atlanta; Auburn, Mass.; Thornton, Ill.; Newark, Del.; and, soon, Hopkinsville, Ky. The only remaining Free-Flow licensee is in Australia.
Macfarlane employed more than 2,000 and reported sales of 91.3 million ($147 million) for the six months ended June 30.
In November, Alucapvit SpA of Milan, Italy, agreed to acquire another Macfarlane plastics operation for 2 million ($3.2 million). Daniel Montgomery & Sons Ltd. injection molds caps and liquor-bottle closures in Kirkintilloch, Scotland.