BOWLING GREEN, KY. - Melbourne-based Amcor Ltd. has lost A$16 million (US$8.13 million) on the sale of its U.S. flexible packaging business to Mercury Flexibles Inc. of City of Industry, Calif.
Bowling Green-based Amcor Flexibles Inc. was sold May 30. Amcor had purchased the film extrusion operation, formerly called Cello Bag Inc., in 1994. Russell Jones, Amcor managing director, said the sale of the U.S. operation was based on its inability to deliver required returns.
``This operation in the U.S. has experienced a difficult 12 months with rising raw material prices and lack of scale impacting on our ability to deliver satisfactory returns,'' Jones said. ``The U.S. remains an important market for us in flexible packaging, and we will look for growth opportunities which offer scale and technological expertise.''
The facility in Bowling Green has two five-layer coextrusion lines and two three-layer lines. The deal also includes eight printing presses, and laminators, slitters and bag machines, Benjamin Deutsch, Mercury chief executive officer, said in a June 6 telephone interview.
``We feel this will give us more national presence,'' Deutsch said of the acquisition.
In the next 18 months, Deutsch said, Mercury plans to add extrusion to its converting facility in Salamanca, Mexico, to serve new accounts. The company also has a plant in Santiago, Chile.
Earlier this year, Mercury bought former customer Stretch-Vent Packaging Systems Inc., a maker of produce bags in Ontario, Calif., with sales of about $20 million. Previously, Mercury had reported annual sales of $50 million.
With the sale of its Kentucky facility, Amcor is left with one U.S. converting operation. Jones said. Stevens Flexible Packaging Inc., based in Hagerstown, Md., is profitable and ``although small, has the process know-how and product technology to deliver on-going growth and satisfactory returns.'' Amcor bought Stevens Flexible Packaging in January 2000.