O-I seeks buyer for plastics operations
PERRYSBURG, OHIO - Owens-Illinois Inc. of Perrysburg is looking for a buyer for its remaining plastics business, doing now just what industry officials predicted would happen in 2004 when it sold most of its blow molding assets to Graham Packaging Co. LP.
``Our plastics business is a very attractive franchise,'' said Albert Stroucken, O-I's chairman and chief executive officer, in a Jan. 12 news release.
In a Jan. 12 filing with the Securities and Exchange Commission, O-I said it is reviewing its options. Goldman Sachs & Co. is acting as its adviser.
Industry watchers said the plastics unit no longer is a core asset for O-I, whose remaining plastics holdings include 12 injection molding and blow molding plants across North America and assets in Brazil, Hungary, Singapore and Malaysia. O-I Plastics makes packaging and specialty closures for companies in the pharmaceutical, health-care, food and beverage, household, chemical and personal-care industries.
For its 12 months ended Sept. 30, the plastics division reported sales of $770 million.
O-I hinted at a potential sale during its investors meeting Nov. 15 in New York, analyst Ghansham Panjabi of Wachovia Capital Markets LLC in New York said in a Jan. 12 telephone interview.
``We're not surprised,'' he said. ``I think it's viewed as a positive.''
Panjabi said the business could fetch nine to 10 times earnings before interest, taxes, depreciation and amortization.
O-I wants to trim its $5 billion in debt, Panjabi said. Stroucken, named CEO in December, has all options on the table including a possible overhaul of the company's European glass business.
Graham closing S.C. blow molding site
YORK, PA. - Graham Packaging Co. LP of York will close a blow molding plant in North Charleston, S.C., by mid-February.
The plant is one of more than 60 that Graham operates in North America. The closing will affect 23 employees.
In a Jan. 8 telephone interview, a company spokeswoman said Graham has operated the plant since 1987. She would not disclose the amount of equipment or the square footage of the plant.
Officials said the plant produced automotive oil bottles for a customer that has relocated. Bottle production will be moved to other Graham sites, although officials did not disclose which sites.
Graham ranked No. 1 on Plastics News' 2006 sales-based ranking of North American blow molders, with $2.1 billion in related sales and 63 plants in North America.
Recycler Plastics Revolutions moving
REIDSVILLE, N.C. - Recycler Plastics Revolutions Inc. of Reidsville is investing about $4 million to relocate to a newly purchased facility in Reidsville that company officials plan to occupy by this summer.
The 250,000-square-foot plant will allow Plastics Revolutions to add lines to sort commingled material, an expansion that could create 60 jobs, General Manager Ed Handy said in a Jan. 8 telephone interview.
The company grinds, cleans and repelletizes high-molecular-weight high density polyethylene, making about 3 million pounds of recycled pellets per month, Handy said.
The company also recycles other materials, like polypropylene, but only repelletizes HMW HDPE, he said. Key customers include makers of drainage pipe, coaxial cable, cable reels and Dumpster lids.
A small percentage of the company's business comes from the sale of parking blocks made from recycled PE. Handy said that market is getting tougher as big-box retailers are designing parking lots without blocks, which present obstacles for snow and ice removal in winter climates. Furthermore, many parking-block customers are looking for colored blocks, and the recycled material is difficult to color inexpensively, Handy said.
``You can't take black scrap and make a blue block,'' he said.
Company officials plan to move sometime near June 1 into the new plant, which is just 1½ miles from the current facility. To avoid any service interruption, the old plant will continue operating until the new one opens, Handy said.