British Polythene Industries plc has expanded its agricultural film line and geographic base by acquiring AT Films of Edmonton, Alberta.
AT Films runs four extrusion lines making agricultural and horticultural films, including storage bags for silage and grain, a major growth area targeted by BPI, according to British Polythene Chairman Cameron McLatchie.
``AT Films is one of the world leaders in ag bags,'' McLatchie said in a telephone interview. Such bags show promise in supporting the growth of biodiesel fuel. Facilities making fuels from agricultural stocks need a daily supply of grain or other feedstock, so storage of the grains is crucial from time of harvest until they are fermented into fuels, he explained.
``We believe that there is significant opportunity to expand sales of this product as global demand for biofuels increases,'' he said.
AT Films fits BPI's already-big stake in agricultural films and will help the Greenock, Scotland-based firm transfer agricultural bag technology around the world, according to McLatchie.
AT Films also provides a North American production base to make BPI's range of agricultural and horticultural films. One of BPI's products is a film that boosts yields of soft fruits such as strawberries. Import duties for BPI's products entering North America are high, and AT Films provides an alternative to importing.
McLatchie said BPI has no grand plans to expand in a general sense in North America. AT Films is a strategic purchase centered on agricultural markets. Once BPI has had a chance to run AT Film's four extrusion lines in Edmonton and nearby Westlock, Alberta, it probably will invest a modest amount to boost productivity, but has no plan to expand capacity dramatically. The business now has about 90 employees, two-thirds of whom work at the Edmonton site.
BPI paid US$12 million for AT Films, which had sales of US$35 million last year. The company made 27.5 million pounds of film.
McLatchie said there is growing interest for agricultural bags in Europe. Although most livestock in Europe is grass-fed, biofuels demand is rising and should bode well for usage of the bags on the continent to store grains and silage.
BPI had sales of 414 million euros (US$520 million) last year. Although agricultural products are a big part of its business, it is a diverse producer of films and bags for a range of markets.
BPI bought AT Films from Celanese Corp. of Dallas. Not included in the deal is the AT Plastics polymers operation in Edmonton, a producer of ethylene/vinyl acetate copolymers and other resins. Celanese acquired the AT businesses when it bought Acetex Corp. in 2005. Acetex and AT merged in 2003, a year after AT sold its packaging films business based in Brampton, Ontario.