Extruder Imperial PlasTech Inc. plans to bolster its plastic composite decking business by acquiring Pultronex Corp.
Imperial expects the deal will build on its recently launched wood-fiber/plastic composites for decking and other residential uses through a new subsidiary, Imperial Building Products. The subsidiary has signed a definitive agreement to buy certain assets from Pultronex, a producer of pultruded glass-fiber-reinforced plastic decking, railings, sea walls and scaffolding in Edmonton, Alberta.
Imperial of Toronto said Feb. 13 it agreed to pay about C$600,000 (US$377,000) for certain Pultronex production equipment and intellectual property.
Pultronex had sales of about C$4.2 million (US$2.8 million) for the year ended Aug. 31. Imperial President and Chief Executive Officer Victor D'Souza said in a news release that Pultronex's product line is a natural extension of his firm's new wood composites lineup and that the deal will boost Imperial's presence in the United States, where Pultronex has logged about 80 percent of its sales.
New products and acquisitions are key strategies for Imperial after the firm recorded a net loss of C$5.3 million (US$3.4 million) for its fiscal year ended Nov. 30. Reduced shipments of conduit and cable in conduit to telecommunications customers and the general economic slowdown caused sales to fall 16 percent to C$49 million (US$31.7 million) for the year, Imperial noted in a recent news release. The loss included a C$600,000 (US$388,000) write-down of assets related to the telecommunications business and C$1 million (US$646,000) related to bad debt expenses from two former, undisclosed telecommunications clients.
In its fiscal 2000 year, Imperial had net profit of C$5.1 million (US$3.4 million).
Imperial last year consolidated its three Ontario manufacturing plants to two in Peterborough. To further cut costs, it combined its Atlanta sales office and manufacturing operation.
D'Souza said the Pultronex purchase will help Imperial diversify so that it is not overly dependent on one market or region. In fiscal 2000, one customer accounted for about 51 percent of its sales. In fiscal 2001, no customer amounted to more than 10 percent of sales.
Other diversification moves include a push in high density polyethylene pressure pipe for geothermal and industrial piping, certification of a new line of cross-linked PE pipe for residential plumbing and heating, and production of an industrial hose product line acquired last year.