Amcor Twinpak-North America Inc. plans to enter the western U.S. PET container market.
The Canadian firm's Amcor PET Packaging-North America business unit agreed to buy CNC Containers Corp. of Tumwater, Wash., Amcor Twinpak announced Jan. 15. It expects to finalize the purchase by mid-February.
CNC blow molds PET containers in Tumwater; Tucson, Ariz.; Commerce and Lathrop, Calif. Amcor Twinpak said CNC's annual sales are about US$170 million.
"This investment is strategic to Amcor's growth plans outside of the Canadian market," noted Garry Davis, president and chief operating officer of Amcor PET Packaging-North America.
He said the PET container market in California alone is larger than the Canadian market.
Amcor PET Packaging of Mississauga, Ontario, claims to be the leading PET container producer in Canada. Its sales for the year ended June 30 were US$150 million.
CNC injection molds PET preforms and blow molds more than 80 types of bottles for soft drinks, bottled water, isotonic juices, dairy products, liquor and edible oil.
Davis said Amcor PET Packaging would use its barrier heat-set technology to expand CNC's product line in juice and specialty beverage markets. Amcor also will add multilayer barrier coatings technology for beer and food markets.
CNC's technology strengths include wide-mouth container development, packaging design and heat-set research.
Amcor PET has sold negligible amounts of PET containers in the western United States, Davis said in a telephone interview. It has two plants in western Canada — in Vancouver, British Columbia, and in Calgary, Alberta. Its other plants are in Mississauga, Montreal, and Moncton, New Brunswick.
Davis said his company wants to retain CNC's management team and has no plan to close any plants. Amcor PET will run CNC as a separate division for a year or so and then consider how to integrate the U.S. plants in its organization.
CNC was founded about 10 years ago mainly by a group of Pepsi-Cola franchisees, although other investors have come on board since. CNC officials were unavailable for comment.
Both Amcor and CNC are involved in Latin America. CNC recently acquired 80 percent of PET Products International Peru SA of Lima. PPI is expanding into Venezuela by building a PET container plant in Valencia. Davis said Amcor PET will complete that plant.
Amcor PET last year acquired a 60 percent interest in Injepet Embalagens Ltda. of Sao Paulo, Brazil. It earlier set up a technical alliance with Platiglas SA of Panama City.
Amcor Twinpak of Montreal is a subsidiary of Amcor Ltd. of Melbourne, Australia. Amcor sources said Amcor Twinpak agreed to pay about US$200 million for CNC, including an initial US$180 million and the balance based on CNC's 2001 financial results.