Flexible packaging company Printpack Inc. has purchased a 49 percent interest in a new minority-owned venture that will yield three plants and potential dividends with Printpack's largest customers.
Printpack formed the new company, called Diversapack, with Woodrow Hall, the owner of converter Film Fabricators Inc. of Norcross, Ga. Minority-owned Film Fabricators is part of Procter & Gamble Co.'s minority supplier development program and has been awarded several minority contracts by the Cincinnati company.
The deal follows a failed merger attempt between Film Fabricators and bag converter Johnson-Bryce Corp. of Memphis. That deal would have created one of the nation's largest minority-owned flexible packaging companies.
P&G had helped put together that merger, and had planned on awarding the Hall-Bryce Alliance, as it was to be called, a three-year contract worth $100 million.
Instead, Film Fabricators' two plants in Marengo, Ill., and Orland, Ind., have become part of Diversapack. Hall will own 51 percent of the venture.
Printpack is combining the two Film Fabricators plants with a third in Cincinnati to create Diversapack. The third plant was owned by Orflex LLC, a joint venture between Printpack and former basketball star Oscar Robertson. That plant does flexographic printing, extrusion lamination and coating.
Robertson sold his share of that venture to Hall for an undisclosed price.
Together, the three Diversapack plants have about 200 employees, said spokeswoman Susan Folds of Atlanta-based Printpack. The plants' capabilities include blown film manufacturing, contract packaging and assembly, bag making, rotogravure printing and laminating.
``We have customers who wanted a full-service [flexible packaging] supplier who could offer those services through a minority partner,'' Folds said. ``It gives us additional facilities under a minority venture to work with consumer-product companies.''
Hall, who did not return two telephone calls seeking comment, had built a company with about $25 million in sales and 140 employees since 1993, according to recent media accounts. But it was a possible merger with Johnson-Bryce, another $25 million extruder and printer of plastic bags, that first gained Hall public attention in fall 2000.
P&G had arranged for the two companies to meet and announced the Hall-Bryce Alliance at the annual convention of the National Minority Supplier Development Council in New Orleans. The company had planned to make packaging for P&G's Pampers diapers and employ 250 people.
But that deal, which would have made Hall chief executive officer, fell apart in the spring of 2001 due to differences between the companies. Since then, Johnson-Bryce has gone its separate way and attempted to grow its business on its own, said owner Robert Johnson.
``We both tried but we could not do [the merger],'' Johnson said in a Feb. 28 telephone interview. ``Even if a minority contract is an advantage in the introductory stage, it still gets down to competitive service and problem solving. A minority agenda does not substitute for the other.''
P&G has used Film Fabricators for the plastic packaging on its Pampers and Charmin toilet paper lines, among others. P&G has a network of minority suppliers that plays a key role in more than 250 brands, said spokesman Damon Jones.
In October, the company committed to spend $1.5 billion by 2005 with minority-owned and women suppliers. P&G will spend 11 percent of its procurement budget with those targeted suppliers, Jones said.
P&G officials could not say before deadline whether they played a role in Diversapack's creation, Jones said.
Privately owned Printpack, which recorded sales of nearly $1.03 billion in fiscal 2001, has a customer base that includes many of the top consumer products companies, including P&G, Coca-Cola Co. and Kellogg Co.
Film Fabricators has supplied those same three customers with flexible and contract packaging. Terms of the deal and potential contracts were not disclosed.