Reko International Group Inc. has inked a deal to sell its majority interest in U.S.-based injection molder Superior Plastics Inc. and focus on its mold-making and engineering capabilities.
Michael Dunn, vice president of finance for Oldcastle, Ontario-based Reko, said in an Oct. 4 telephone interview that he would not identify Superior's buyer until the deal wraps up in late October or early November.
Reko bought 80 percent of Rochester, Mich.-based Superior in early 2003 to expand its offerings. Superior molds interior and exterior trim as well as functional components for the auto industry.
Reko cited sales of C$19.9 million Canadian (US$17 million) for Superior in its last fiscal year, which ended July 31. The unit posted a loss of C$3.7 million (US$3.2 million) for the year.
The decision to sell Superior comes as the Canadian dollar is strengthening, which has affected the bottom line for Reko. The company has about 85 percent of its sales in the United States. While Superior saw about the same sales numbers in U.S. dollars year over year, those sales were worth less in Canadian dollars, dropping from C$22.8 million to C$19.9 million.
Reko noted, though, that Reko's other operations saw a boost through the year, climbing to C$79.3 million (US$67.7 million) from C$73 million (US$54.8 million).
Those facilities posted a loss for the year of C$777,000 (US$663,000), but had seen a profit of C$231,000 (US$188,000) for the fourth quarter.
The divestiture will allow Reko to focus on its core business, said Steve Reko, president and chief operating officer, in a news release.