Tuscarora Inc. has purchased the assets of longtime foam molder and fabricator Polyfoam Packers Corp., exponentially boosting Tuscarora's presence as a maker of temperature-sensitive protective packaging.
The sale, for $22 million, gives Tuscarora a major market focus in insulated packaging, used for such cold- and heat-sensitive products as medical and pharmaceutical samples and vaccines, refrigerated foods and diagnostic-laboratory products, said President John O'Leary of Tuscarora, based in New Brighton, Pa.
``We believe it's a growing area, and it has performed well during the recent recession,'' O'Leary said in a Jan. 17 telephone interview. ``There's been an increasing awareness on the [U.S.] government's part to validate packaging and regulate it. It's not simply a matter of making a product cold or warm; certain products have to stay within a given range of temperatures.''
The acquisition's centerpiece is Polyfoam's 130,000-square-foot foam molding facility in Michigan City, Ind. The plant molds such products as laboratory-specimen mailers, refrigerant gel packs and cold-chain management products, all made from expanded polystyrene.
The plant is one of the largest in the country performing shape molding, said Leora Rosen, Polyfoam marketing director and daughter of company founder Max Segel. Wheeling, Ill.-based Polyfoam recorded about $30 million in sales last year. The company, founded in 1946, has about 220 employees in Michigan City and Wheeling.
Leora Rosen and Polyfoam President Mort Rosen will stay with Tuscarora to head a new division focused on temperature-sensitive packaging products, based in Wheeling. More than 20 percent of Tuscarora's sales - $60 million to $70 million annually - will focus on that specialized, temperature-controlled packaging, O'Leary said.
Foam fabricating will be discontinued at the Wheeling site, and equipment will be shifted to other Tuscarora plants in Burlington, Wis., and Michigan City, O'Leary said. The plant's 30-40 manufacturing workers will be offered positions elsewhere within Tuscarora.
``We have hundreds of proprietary products that we have developed ourselves,'' said Leora Rosen. ``It's an opportunity for us to extend the reach of our business and use [Tuscarora's] marvelous manufacturing network all over the United States.''
Tuscarora plans to spend as much as $1 million during the next several months to modernize the layout of the Michigan City plant, O'Leary said.
The acquisition will give Tuscarora three plants that make the insulated containers. Besides the Michigan City facility, the company also manages temperature-sensitive packaging sites in Phoenix and Louisville, Ky.
Those latter two plants were purchased in August, when Tuscarora's parent company, Swedish paper and packaging giant Svenska Cellulosa Aktiebolaget, bought Insulated Shipping Containers Inc. The former ISC plants make containers by injecting polyurethane foam, while the Polyfoam plant specializes in EPS molded packaging.
The PU products are higher-end and more-expensive, while the new EPS molding work gives the company expertise in the middle- and lower-end of that market, O'Leary said.
Tuscarora plans to add temperature-sensitive packaging at one or two of its other plants as it expands the new insulated-container division, still to be named.
Polyfoam had restructured its operations before selling the business. The company sold off several packaging plants focusing on the construction market, closed a manufacturing facility in Effingham, Ill., in March and sold another EPS packaging plant in Mount Pleasant, Tenn., to Tuscarora in September 2000.
Polyfoam's network of indirect distribution attracted Tuscarora, O'Leary said. The company uses a sophisticated catalog network to sell insulated containers, products that generally are shipped the same day and in high volumes.
Tuscarora ended 2001 with about $250 million in North American sales, O'Leary said. With the acquisition and other business, the company expects that figure to rise to about $325 million in 2002, he said.