British packaging major David S Smith Packaging Ltd. has acquired its first North American production by purchasing Formative Engineering Corp. of Lester Prairie, Minn. The London-based firm paid $6.4 million to acquire Formative, an industrial injection molder that fits Smith's liquid-dispenser business. Formative runs 20 presses with clamping forces of 25-150 tons and employs 56.
Smith plans to make more plastics acquisitions in North America, according to divisional marketing manager Stephen Morris.
North America accounts for about 40 percent of Smith's plastic dispensers business through exports. Formative will produce dispensers for local markets, Morris said in a telephone interview from London.
One of Smith's key products is the Press Tap dispenser used by Procter & Gamble Co. for Tide liquid detergent. Smith's product line includes dispenser taps for wine, water and chemicals, and large dispensers for intermediate bulk containers.
Dale Woodbeck, former owner of Formative, has become president of Smith's U.S. operations, reporting to Alex Regan, managing director of the firm's Worldwide Dispensers unit. Woodbeck said in a telephone interview that the Lester Prairie plant will add machinery and floor space as Formative takes on Smith work. Formative has been doing a variety of custom molding jobs.
Smith's other plastics businesses include liquid-packaging bags, returnable pallets, crates for beverages, and laminated paper. Other products, such as paper packaging and office paper, round out its annual sales of 1.1 billion ($1.65 billion).
"This acquisition provides an excellent opportunity for Worldwide Dispensers to enhance its service to its existing market in the [United States] and to develop further business with Formative Engineering's sound customer base," Regan said in a news release.
Smith has been exporting its Press Tap to P&G's U.S. operations since 1998. It is used in 300-ounce rigid Tide containers. Press Tap, developed by the British firm, also is used for wine packaging. Smith worked with P&G to develop a high-flow, high-dome version with an integral screw for the new liquid container.