In an unusual marriage, Swiss machinery maker SIG Group has purchased Ryka Blow Molds Ltd., handing SIG its first tooling capabilities in North America.
Few machinery companies, at least on the North American continent, had gone after an existing toolmaker, said Dave Brown, president and chief executive officer of tooling company StackTeck Systems Inc. of Brampton, Ontario. The venerable Ryka, celebrating its 30th year in business, is considered one of North America's largest blow mold producers.
``They are absolutely a top-notch shop and, without a doubt, pushing the envelope,'' Brown said. Ryka is based near StackTeck, in Mississauga, Ontario. ``Usually machinery guys are not that close to [an existing] mold maker, or they become a mold producer themselves. It's very unusual for a machinery guy to buy a mold making guy.''
But SIG had wanted to increase its North American presence in tooling without having to start an operation from scratch, according to Martin Bratzler, project manager for mergers and acquisitions with the blow molding equipment company, based in Neuhausen Rhine Falls, Switzerland.
Meanwhile, Ryka President Michael Ryan, 62, was looking for a way to sustain the company long after he decided to retire, Bratzler said. Ryan was traveling and unavailable for comment.
The purchase, terms of which were not disclosed, was completed Oct. 10.
SIG now owns Ryka's 58,000-square-foot facility in Mississauga and will keep its 89 employees. Ryan will remain as president of the North American tooling group, which SIG is considering renaming SIG Ryka.
Ryka will remain an independent toolmaker that works for customers outside the SIG umbrella, Bratzler said.
That differs from other blow molding machinery suppliers that have captive operations in North America. Husky Injection Molding Systems Ltd., which recently started making blow molding machines, makes molds at its Bolton, Ontario, headquarters. Groupe Sidel does the same at its U.S. headquarters in Norcross, Ga.
``We hope we can have some synergies there, but realistically, we do not have a lot of our machines in the installed base at Ryka,'' Bratzler said. ``That's why we don't want to make it a captive SIG mold shop. It's an aggressive and innovative company that serves the whole industry, not just those who have SIG machines.''
SIG also owns a tool shop in Essen, Germany, acquired three years ago from Thyssen Krupp AG.
But that is a long way for North American customers to travel, Bratzler said. While Ryka will continue as a separate operation, SIG officials hope to offer tooling services to machinery customers looking for a mold supplier, he said.
Ryka makes a variety of molds for PET and high density polyethylene packaging. Under SIG ownership, the company would like to hike Ryka's work in molds for PET bottles, a major chunk of SIG's business, Bratzler said.
Ryka also makes blow molds for the automotive and industrial markets. The company will record sales of about C$11 million (US$6.94 million) this year, Bratzler said.
The tooling deal caught several toolmakers by surprise. The recent business downturn has blanched the flow of acquisitions. Some expressed concern that Ryka's customers might not be comfortable with SIG's ownership, especially if they are using equipment from a rival company.
``Customers like to have choices in machinery and mold suppliers,'' said one tool shop owner, who did not want his identity used.
The sale was an interesting step for SIG, even with its potential risks, said Thomas Jordan, vice president of the plastics division for Krones Inc., a blow molding machinery company with U.S. headquarters in Franklin, Wis. Krones does not own a North American tool shop.
``I see an advantage if people are looking for new product introductions and need both designs and prototypes,'' Jordan said. ``But I don't know how this works if [an equipment supplier] buys somebody like Ryka. They don't just sell one kind of bottle, but they work with everyone.''
But Ryka's capacity in HDPE blow molds might be a good fit for SIG as it expands sales in those areas, Jordan said.
Sales have been fairly stable at Ryka during the past two years, even with the market slump, Bratzler said.
``Under those market conditions, that's kind of an achievement,'' Bratzler said. ``Ryka has very good people and a good team and a good name. It has helped them do a little better than some of their competitors.''