Rotational molder RTS Plastics Inc. is getting a U.S. manufacturing plant through the receivership of one of its suppliers.
N.E.O. Plastics Inc. of Austinburg, Ohio, went into receivership Nov. 1. RTS of Waterloo, Ontario, is buying the N.E.O. assets out of receivership for undisclosed terms.
N.E.O. was a relatively recent supplier for RTS, which shipped molds to N.E.O.'s plant. Buying N.E.O. will allow RTS to manufacture goods in U.S. dollars, which will help the firm avoid paying with the higher Canadian dollar, then exporting to the United States. As a new subsidiary of RTS, the Austinburg plant will continue supplying the U.S. market with playground equipment, children's racing carts, rain barrels and other RTS products, all made under the cheaper U.S. dollar.
The Austinburg operation has been renamed RTS Companies USA Inc. It runs a Ferry 330 and Ferry 430 rotational molding machines and processes polyethylene exclusively, said interim general manager Vickie Cegliastro in a telephone interview.
``We're going to run as is now and over the next year or so we will look at the possibility of expanding,'' said Cegliastro, who also is general manager of the Waterloo operation. About 36 are employed in Austinburg.
Cegliastro praised the local Growth Partnership for its nonfinancial assistance in helping RTS make the acquisition.
``They helped us work through the deal, providing contacts and legal advice,'' she said.
The purchase by RTS has yet to be approved by the courts, a process Cegliastro expects will happen in two to four weeks. N.E.O. filed for Chapter 11 bankruptcy protection in early 2007. Its Chapter 11 status ended in October and it was put into receivership shortly afterward.
RTS is perhaps best known as the manufacturer of race-car shopping carts for large retail stores. It had sales of US$9.9 million for the year ended Oct. 31, 2006. Its 55 employees run four rotomolders, according to Cegliastro.