A subsidiary of one of Japan's largest companies has bought a minority stake in flexible packaging converter Kapak Corp.
New York-based Itochu International Inc. has purchased a 35 percent share of Kapak, a large, Minneapolis-based converter of preform stand-up pouches and film roll stock. Kapak President and Chief Executive Officer Gary Bell owns a majority of the company, co-founded by his father in 1961.
Itochu International may take a controlling interest in Kapak if the partnership is successful, said John Favreau, vice president of corporate development and strategy for Itochu International. The U.S. arm of Tokyo-based Itochu Corp. has 21 wholly owned subsidiaries and investments in more than 40 companies, Favreau said.
Another option would be to acquire other film companies that can share resources with Kapak, he said.
``To be able to manage nationwide distribution and keep a strong customer base, companies have to consider consolidating,'' he said Aug. 12. ``We're looking at acquiring others to make this a bigger business.''
Itochu International has an ownership interest in shrink-film supplier Bonset America Corp. of Brown Summit, N.C. Its parent, Itochu Corp., owns both suppliers and distributors to flexible packaging companies located outside North America, Favreau said.
Itochu Corp. has offices in 80 countries and is ranked among the world's largest companies, with $85.8 billion in sales. The company owns market leaders in a variety of manufacturing and service industries.
The Japanese firm is encouraged by the growth of film products in the United States, said Hiroshi Kitamura, Itochi International president and chief executive officer, in a news release. Kapak performs printing, adhesive lamination, slitting, spout insertion and die cutting for many of its stand-up pouches.
``While in Japan and other parts of the world, flexible packaging has surpassed rigid packaging, the U.S. is just beginning to see the rewards of switching to this type of packaging,'' Kitamura said. ``We believe strongly in Kapak because it has embraced innovative technology that will serve it well in the future.''
Itochu's global experience in flexible films and its technical knowledge of chemistry will help Kapak grow, Bell said in the release. The agreement was signed July 28.