Two British custom injection molders, both serving the automotive industry, have joined forces to grow their joint business more profitably.
Plastic Technologies Ltd. of Birmingham and Excel Technical Mouldings Ltd. of Paignton will combine their operations at PTL's large Smethwick site. The result overall will be a loss of about 30 jobs.
Under the banner of XL Plastic Technologies Ltd., the firms aim to expand their joint sales over the next two years from £10 million ($18 million) to £15 million ($27 million). The XL management sees fresh market opportunities, particularly in areas like materials handling, construction and large-component molding, said Managing Director Tony Cox.
The merger should be complete at the end of July, and the company already is looking to consolidate further. XL is in talks with three or four other firms with a view to new acquisitions, Cox said.
When the merger is complete, Excel's site in southwest England will close, cutting all but a handful of its 60 workers. Most employees were unwilling to move north to the PTL site, where XL is creating about 40 jobs, according to Cox.
PTL, a company formed in 1999 to acquire Brittons Plastics out of receivership, has faced several difficult years financially, turning in a loss of £2 million ($3.62 million) in 2001. The company suffered from cost pressures and found difficulty operating profitably on its 5-acre site, said Cox, its chief executive officer prior to the merger.
PTL was forced to reach a voluntary agreement with its creditors when it was unable to find sufficient work to run the plant profitably. The firm tried to attract new business but this was difficult in view of its financial history, Cox said.
A recovery plan led PTL management to seek a smaller molding business to merge with.
``We were carrying a lot of debt from the previous losses as it was difficult when a merger was being considered,'' Cox said.
Excel Technical Mouldings, owned by the Swindon, England-based sensors manufacturer Precision Varionics International Ltd., had a similar background, also serving largely the automotive market and coming from administration, according to Cox.
Talks aimed at a merger began last year.
PTL also molded wheeled bins for the materials-handling industry, as well as serving the consumer and leisure sectors. The company ran 33 injection presses, from 22-2,150 tons, and employed 100.
Excel operated 23 injection presses, mainly from Demag and Toshiba, and XL will take on all but one of these machines, while weeding out a number of smaller PTL presses. XL plans to start operations with 41 presses, Cox said.
Cox estimates that the Smethwick site will allow XL sufficient space for annual sales of about £20 million ($36 million).