PCL Plastics Corp. has diversified into nylon films and bags by acquiring a 50 percent stake in Gem Polymer Corp. of Delano, Pa. PCL, based in Oakville, Ontario, is a major producer of polyethylene carryout and trash bags. Gem Polymer makes blown nylon film and bags for applications such as oven and roasting bags, meat packaging, autoclavable medical products, vacuum-bag molding and chemical packaging.
Bill Swinimer, PCL chairman and chief executive officer, said his firm wants to boost its stake in specialty markets with high profit margins. Nylon bags and films fit that goal, he said in a telephone interview.
PCL plans to increase its penetration of nylon packaging markets by making more acquisitions, he said. PCL currently is in discussions with an undisclosed acquisition candidate.
Swinimer did not reveal the cost of PCL's stake in Gem Polymer, but said it included cash and funds that will be used to expand Gem Polymer. In April, Gem Polymer will install a new blown nylon film line supplied by Macro Engineering & Technology Inc. of Mississauga, Ontario. The line will be its fourth.
In May, Gem Polymer will enter cast nylon film production by installing two lines from an undisclosed film producer. With extra bag-making machinery, the expansion will cost more than C$1.5 million (US$1 million), according to Swinimer.
Rudy Gherghel, Gem Polymer president and CEO, said the company wants to enter cast nylon film because cast film properties differ from blown film, offering more opportunities in food packaging and other uses.
Cast nylon film can be made as thick as 15 mils, several times thicker than blown nylon film. Since cast film is not oriented during production, it can be thermoformed more easily, allowing deep-draw constructions, Gherghel said. Cast film output can be twice as high as blown film, and the film can be made as wide as 90 inches. Cast film also allows surface modifications for aesthetic appeal, Gherghel added.
Gherghel did not disclose sales for Gem Polymer, which he established in 1995.
He said he expects PCL's geographic reach to help Gem Polymer expand its markets. PCL has plants in Oakville; Pueblo, Colo.; Delta, British Columbia; and St. John, New Brunswick.
Swinimer estimates privately held PCL's 1999 sales at C$100 million (US$69 million).