AEP Industries Inc. has pulled out of its 50-50 Asia liquid-packaging joint venture, Rapak Asia Pacific Ltd., selling its stake to its British partner, DS Smith plc.
Terms were not disclosed. The deal strengthens London-based Smith's position as the world's second-largest supplier of bag-in-box packaging, and it allows AEP to concentrate on other film and flexible packaging markets.
The venture, which formed in November 2001, brought together the Australasian operations of AEP's Auckland, New Zealand-based Liquipac business and Visy Films & Laminates' Liquid Bag Systems business based in Fielding, New Zealand, and Melbourne, Australia.
The move coincides with the integration of the two New Zealand plants in a new, 59,400-square-foot facility in Auckland. The plant will house US$3.2 million in new equipment, according to Graham Barker, director of Smith's plastic packaging division.
Speaking from DS Smith Plastics division base in Rugby, England, Barker added that AEP ``always envisaged'' selling out of the joint venture, and the mechanism for doing so had been included in the original agreement between the partners. AEP has been investing heavily in other areas of flexible packaging in the region, he added.
The Asian acquisition follows another last year when Smith took over leading European bag-in-box producer Zewathener GmbH of Schwetzingen, Germany, for an undisclosed sum.
Zewathener, which in particular serves the catering and retail wine areas, employs 122 and had sales in 2001 worth 21.7 million euros ($24.7 million). Smith acquired a 51 percent share in it from SCA Packaging of Sweden, while the remaining 49 percent is held by the former management represented by Paku-Pack Papier-und Kunststoff Verpackungen GmbH.
Rapak Asia Pacific is one of several Rapak international operations, including Rapak PSI in Romeoville, Ill., as well as in France, Germany and the United Kingdom. Rapak is part of DS Smith Plastics division's Liquid Packaging and Dispensing segment, which has annual sales of about £100 million ($161 million).