Pliant Corp. will invest about $3 million in its Canadian packaging operations in 2008, with an eye toward expanding its national market share.
Officials of the Schaumberg, Ill.-based film producer said the new investment is in addition to $4.5 million it spent on Canadian projects in 2006 and 2007. In addition to its Canada head office and manufacturing facility in Orillia, Ontario, Pliant operates a plant in Toronto.
``Our program of continued capital investment combined with a re-energized Canadian team will drive Pliant's ambitious growth plans,'' Harold Bevis, Pliant president and chief executive officer, said in a July 22 news release.
Pliant has said it will seek Canadian acquisitions and expand its sales force in the country. The move is similar to growth initiatives under way in Europe, Asia and Mexico, the company said. Pliant and Nova Roll of Moscow recently announced a joint venture to produce film and packaging for European markets.
Pliant's Canadian strategy includes new leadership in Orillia. In March, Tim French rejoined Pliant —where he once ran the Orillia manufacturing operation — as managing director for Canada.
During the early 2000s, French was president and CEO of PCL Packaging Corp. in Oakville, Ontario, a film and bag maker that went bankrupt earlier this year. French went back to Pliant after a short stint as CEO of tractor and snowplow maker Snowbear Ltd. of Guelph, Ontario.
After struggling with price increases for resin, shipping and energy, as well as $1.2 billion in debt, Pliant in 2006 filed for Chapter 11 bankruptcy.
The company emerged from Chapter 11 with a $200 million exit loan from Merrill Lynch. In 2007, Pliant closed plants in Barrie and Langley, British Columbia, as it consolidated its film business. In May, the company said it would close four underperforming U.S. plants as it adds capacity in other facilities.
Tim Burns, a research analyst with Solon, Ohio-based Cranial Capital Inc., said he is unimpressed by Pliant's additional investment plans in Canada.
``It's still a very unhealthy company which is trying to look and feel like it's making progress,'' he said. Burns said Pliant will continue to struggle with its debt and the high energy, resin and transportation costs that are ``killing'' packaging manufacturers.
Globally, Pliant had about $1.1 billion in sales in 2007, with Canada accounting for about $110 million of the total. The firm produces packaging for personal- care, medical, food, industrial and agricultural markets. Pliant operates 21 manufacturing and research and development facilities around the world and employs about 2,900.