A film extrusion firm that makes packaging and an unusual plastic currency used in Australia and New Zealand soon will have a new owner.
Brussels, Belgium-based UCB SA is selling UCB Films to a consortium backed by Candover Partners Ltd., a London-based private equity firm, for 320 million euros ($390 million).
UCB Films, which will be renamed, makes oriented polypropylene and cellulose films at plants in Belgium, Britain, Australia and the United States. The company employs 1,600 and generated 2003 sales of 362 million euros ($441 million). The company serves the specialty packaging, label, graphic arts and security markets.
The new owners plan to invest in the OPP banknote business, with plans for new substrate plants in Europe and the Americas within two years. That unit, called Securency Pty. Ltd., has two extrusion lines at a plant in Melbourne, Australia, and is a joint venture with the Reserve Bank of Australia.
Both venture partners recognize the global potential for the product, which already is used for the currency of 20 nations including Australia and New Zealand, according to Dennis Matthewman, who is leading the buyout and will serve as chairman of UCB Films.
``It is easy to make the substrate needed for the banknote,'' Matthewman said in a July 22 telephone interview. ``It is inert and does not stress. It is delivered in reams of plastic to the printer just like with paper [banknotes].
``These banknotes are six times longer-lasting than paper ones. The film doesn't stain, doesn't get dirty and there is no forgery threat with it because the security is built into the notes,'' he said.
The partners have taken 12 years to develop the technology used in the process. One growth region is Latin America, where at least two countries - Brazil and Mexico - already have begun using plastic bills for some denominations. Matthewman forecasts that a new plant could go up in the region within the next year.
But the big, longer-term prize the team has its eye on is Europe's common currency, the euro.
``If we are going to make an impact in Europe we will have to manufacture locally,'' Matthewman said, and a plant in continental Europe could be in place within the next two years, he said.
Matthewman is the former director of British support-services company Hays plc, also a Candover-backed buyout. Some key senior UCB managers and advisers will stay with the film unit, he said.
UCB Group is disposing of the films business, which it has run for 30 years, to concentrate on its pharmaceutical business. The deal is to be complete by early September.
UCB Films can make 287 million pounds of OPP and cellulose films annually. It has two large OPP film lines in Merelbeke, Belgium, and 11 smaller lines at its larger plant in Wigton, England.
Cellulose film production is centered on a plant in Bridgwater, England, which has six casting lines, and Wigton, which has five lines.
In the United States, a plant in Tecumseh, Kan., focuses on thin-gauge cellulose film. UCB bought the plant in 1997 from Flexel Inc.
Wigton also is home to the division's research and development center, which opened in 2002.
Matthewman is confident there are good market opportunities for the company's cellophane products. With their wood-pulp base, they fit the growing demand for ``green'' products and biodegradable packaging, he said.
Candover soon will decide on a European location for the company's new headquarters, Matthewman added.
