Financially bereft Plassein International Corp. is close to dispersing the final pieces of its once-diverse film group after some hard-fought battles at several properties.
The company reached an agreement June 10 with EuroPackaging plc, a global film extruder in Birmingham, England, to buy Plassein's Salem, N.H., plant. Europackaging was awarded the plant, its first U.S. film operation, after a highly contested series of bids for the facility.
Holding company MPF Acquisitions Inc. has made an offer to buy Plassein's Martin, Mich., extrusion plant, said MPF General Manager John Roggow. While the company waits to see if the offer is accepted by U.S. Bankruptcy Court in Wilmington, Del., MPF has reopened the plant and is leasing the space, Roggow said.
MPF is owned by Marshall Forsberg, who founded Martin-based Marshall Plastic Film Inc. in 1972 before selling it to Plassein in 2000. Forsberg now wants to retake control of his former site.
The fate of another Plassein operation in Martin, an automotive film distribution center formerly owned by Plastical Industries Inc., still is in doubt. Petoskey Plastics Inc. of Petoskey, Mich., has purchased about 5 percent of the plant's inventory, a move that is being contested in court by another former owner of a Plassein facility.
The divvying-up of Plassein's properties comes after the company's quick descent. A film extrusion roll-up company started by investment bankers three years ago with high hopes, the company hired an outside firm in April to seek buyers. A month later, on May 14, Plassein entered Chapter 11 bankruptcy protection.
It quickly agreed to sell three other facilities in May to Spartanburg, S.C.-based Exopack LLC after an auction held by Chicago-based Mesirow Financial Inc. Plassein also was seeking $12 million in bank financing to keep its operations afloat while the sales proceeded.
The EuroPackaging deal has been accepted, and the British company will take possession of the Salem plant the week of June 16, said Afzal Majid, EuroPackaging joint managing director. The $30 million facility makes coextruded polyethylene bags on seven to nine production lines, Majid said.
EuroPackaging recorded about $250 million in sales last year. The company plans to retain the 150 employees at the Salem plant and hopes to grow that number, Majid said. EuroPackaging wants to build a foundation for a bag-making business in North America and is seeking other acquisitions there, he said.
With the Salem facility, the company has 11 worldwide extrusion and papermaking plants. It does much of its bag making in China and Malaysia and has a large manufacturing base in England, Majid said.
The company has more than 150 extrusion lines in Asia, he said. On average, resin prices in Southeast Asia are 30-40 percent lower than in North America, he said.
``Our intention is to grow the [Salem] facility and give customers a blended option,'' Majid said. ``Some supply channels will pass through Southeast Asia and others will stay focused in North America. It will ensure a continuity of supply and a consistency of products.''
The plant's future was in question for a short time. After EuroPackaging won an initial round of bids, other competitors entered the discussions and forced the British company to raise its price substantially, he said. Some of the other bidders wished to liquidate the plant to eliminate competition, he said.
Plassein itself was considering closing the plant in April to shrink its debt, according to a court filing. A patent-infringement lawsuit brought by Sonoco Products Inc. also must be settled. Majid said EuroPackaging will work with Sonoco to reach an agreement.
EuroPackaging plans to grow aggressively in the fragmented North American market. ``It's time for the industry to consolidate,'' he said. ``We see that a number of key properties could come up for sale.''
In Michigan, Plassein closed the former Marshall Plastics plant May 28. MPF has rehired more than 30 workers - more than a third of the former staff - and would like to bring more people back if a sale is completed, Roggow said.
``The absolute keys are the people and the customers,'' Roggow said. ``We want to put the people back to work.''
At the other Martin facility, Petoskey Plastics purchased some raw material for use at the extruder's Michigan operation, said Petoskey President Paul Keiswetter.
But the sale was questioned in a complaint filed by Transamerican Plastics Corp. of Corona, Calif., and owner Sam Chebeir. The lawsuit contends that Chebeir contacted Mesirow Financial on May 16 to bid on buying the automotive specialty films distributor. However, the request was denied by Mesirow and lawyers for Plassein, who said the assets would be sold, the lawsuit claims.
The suit asks that the assets bought by Petoskey be returned to the facility because Plassein did not negotiate with Chebeir in good faith.
Chebeir had sold a former version of Transamerican Plastics to Plassein in 2000 before starting a new company. A lawyer named in the lawsuit did not return a telephone call seeking comment.
Keiswetter of Petoskey said the lawsuit was unfounded and filed after Petoskey had made the purchase. He also said he has empathy for Plassein officials, a company that once included some well-regarded film-industry veterans.
``They were caught in a difficult squeeze between [rising] resin prices and customers,'' Keiswetter said. ``Trying to implement their strategies could not have been easy.''
