Bunzl plc has merged two plastics processing divisions, and despite some reports that the move could be a precursor to selling the newly formed unit, the London-based parent said it wants to grow in plastics.
``We will be looking for good opportunities for acquisitions throughout our businesses,'' including plastics, Chairman Anthony Habgood said by telephone.
Bunzl's plastics operations include profile extrusion and injection molding of caps and plugs. The combined operations are led by former Filtrona division head Mark Harper, and will take the Filtrona name.
Paul Twigden, former managing director of Bunzl's plastics division, is moving to a nonplastics post, Habgood said.
The new division consists of five major international niche businesses: Filtrona cigarette filters; Moss and Alliance plastic cap and plug operations; Bunzl's profile extrusion unit; the European P.P. Payne tear tape and Morane plastics businesses, and Bunzl's bonded-fiber operations.
Included are the smaller, cosmetic plastic tube extrusion and container blow molding business Global Pack SA, as well as a joint venture making roll-on deodorant applicator balls in Sao Paulo, Brazil.
The new structure will save the company several hundred thousand dollars annually, but the primary reason for the combination is to allow the units to share technology and market synergies, Habgood said.
The former plastics division had plans to expand in Brazil and Mexico, including an expansion at Bunzl Extrusion de Mexico SA de CV in Monterrey, Mexico. The new Filtrona management will review the plans, Habgood said.
Bunzl announced the reorganization when it reported its financial results for the six months ended June 30. The company reported a 6 percent boost in profit to £100 million ($153 million) compared with the same period in 2001. Sales were up 7 percent to £1.3 billion ($1.9 billion).
Plastics operations, however, saw an 8 percent drop in profit and a 3 percent drop in sales.