Low density polyethylene bag producer PCL Packaging Corp. is for sale.
The Oakville, Ontario, company is seeking offers to purchase its Oakville facility, the only one left after the sale of three other plants.
PCL's Oakville plant employs about 120 people running 10 extrusion lines. Annual sales from the plant amount to C$30 million to C$40 million (US$30.1 million to US$40.1 million), said PCL Chief Financial Officer and Treasurer Ian Bell.
Bell said in a telephone interview that PCL has been struggling financially and recently filed for protection from creditors. Rather than propose a restructuring, the owners prefer to sell the company as a going concern. BDO Dunwoody Ltd. of Toronto is acting as monitor for the sale.
Inteplast Group Ltd. of Livingston, N.J., recently bought PCL plants in Delta, British Columbia, and North Dighton, Mass. The firm also agreed to buy the PCL plant in St. John, New Brunswick, in a deal slated to close the week of Feb. 18, according to Bell. Prior to the sale of the other three plants, PCL's sales topped US$100.3 million, he said.
Among PCL's difficulties is the strong Canadian dollar, which has encouraged more competition in Canada from U.S. bag producers.
Hanging over the Oakville operation is a plan by the Ontario government to cut plastic bag use by 50 percent during the next four years. Bell said, however, that PCL is well-positioned to weather environmental pressures because it makes reusable LDPE bags and extensively uses recycled resins.
``We haven't lost a lot of [customers],'' Bell said. Customers include major retail chains Loblaw Cos., Sobeys Inc. and Zellers Inc.
PCL is privately owned, with management holding a small portion of shares.
Inteplast Group officials could not be reached for comment on whether their firm might be interested in buying the Oakville operation.