AEP Industries Inc. has completed the sale of its last overseas subsidiary, taking the South Hackensack, N.J.-based film producer back to an all-North American operation.
In an April 4 news release, company officials confirmed the sale of Dutch flexibles subsidiary AEP Industries Nederland BV to Euro-M Flexible Packaging SA of Ghlin, Belgium, and Ghlin srl of Florence, Italy, for about $28 million. Ghlin will be the majority owner, with 51 percent of the shares.
Officials at AEP would not comment on the sale. Euro-M and Ghlin officials were unavailable for comment.
Tim Burns, a research analyst with Cranial Capital Inc. in Solon, Ohio, said the sale of AEP's Dutch operation makes sense, given that the company this decade has steadily sold off assets it acquired in Europe and the Pacific Rim during a spate of buying in the mid- to late-1990s.
``This [sale] is probably the company refocusing the business away from international markets that weren't as lucrative as they had hoped,'' he said. ``It really doesn't make sense to have a plant sticking out on its own over there'' in the Netherlands.
Burns said AEP probably is centering its business on direct-to-customer sales of stretch and shrink films, and specialty products.
In its annual Securities and Exchange Commission filing, AEP reported its Dutch operation included a 216,000-square-foot plant in Apeldoorn that makes custom, stretch, printed and converted films. For the European subsidiary, AEP reported a gross profit of $12.3 million on net sales of $119.7 million for the fiscal year ended Oct. 31 - a 17 percent increase in profit over the previous year. In the filing, company officials attributed the gain to a favorable shift in product mix to higher-margin custom films and improved manufacturing efficiencies.
AEP reported overall gross profit in fiscal 2007 of $151.4 million on net sales of $786 million. In 2006, the company reported gross profit of $161.7 million on net sales of $802.1 million.
AEP manufactures several lines of polyethylene, PVC and polypropylene flexible packaging products. Its films are used in the packaging, transportation, beverage, food, automotive, pharmaceutical, chemical, electronics, construction, agriculture and textile industries.
The company's remaining plants are in Chino, Calif.; Griffin, Ga.; Alsip, Ill.; Bowling Green, Ky.; Matthews, N.C.; West Hill, Ontario; Waxahachie, Texas; and Wright Township, Pa., near Wilkes-Barre.