Oxford Plastics Inc. is expanding with funds it raised by selling its high density polyethylene corrugated pipe division.
Oxford sold the division to Armtec Infrastructure Income Fund for C$5.7 million (US$5.44 million). It kept its solid-wall pipe division and is growing it. The division it sold concentrates on agricultural and building trades markets.
``The sale gives us the resources to expand,'' Homer Vander Vecht, Oxford president and part owner, said in a telephone interview. ``We were crowded with the corrugated [equipment].''
Oxford has ordered eight extruders to more than double its capacity for solid-wall pipe. It currently has six extruders at its Embro, Ontario, operation.
``We needed to get out of corrugated,'' Vander Vecht said. ``There is too much capacity.''
Armtec of Guelph, Ontario, is a major player in plastic corrugated pipe, running eight pipe plants across Canada. It had estimated plastic pipe sales of US$62 million last year. The deal was its second this year. In March it bought Bruce Tile, a Walkerton, Ontario, producer of single-wall HDPE pipe and drainage tile.
Armtec acquired two extrusion lines as part of the acquisition, which was effective Aug. 18. Carrie Boutcher, Armtec's vice president of finance, said the lines will be relocated to other Armtec facilities, but she had no further details. She said sales figures for the purchased business are confidential.
Oxford makes pressure pipe from 8 millimeters to 800 millimeters in diameter. Vander Vecht said in addition to Canada, his company has healthy international sales, but it is not strong in the United States. He said Oxford is working on a backlog of orders for pressure pipe.
In addition to corrugated pipe, Armtec makes plastic sheet used to cover home foundations for waterproofing. Called foundation damping, Armtec makes the sheet in its Orangeville, Ontario, operation.
``The acquisition of these assets further emphasizes our commitment to the Ontario agricultural and building trade markets,'' Charles Phillips, Armtec president and chief executive officer, said in a news release.
Armtec of Guelph, Ontario, became a major corrugated plastic pipe producer in 1998 when it bought Big `O' Inc. of Exeter, Ontario. It focuses on infrastructure products and engineered bridging systems.
In addition to corrugated HDPE pipe, it makes corrugated steel wall pipe, bridge girder systems for precast concrete, retaining walls and acoustic enclosures. It trades on the Toronto Stock Exchange.