Winpak Ltd. expanding in US, Canada
WINNIPEG, MANITOBA Winpak Ltd. will spend about US$10 million this year to expand packaging capacity in two projects. Investment in the expansions will account for about a third of the company's total capital expenditures for 2009.
The firm will add a third line for barrier shrink-bag production at its Senoia, Ga., facility, said Ken Kuchma, Winpak's vice president and chief financial officer, in a Feb. 18 telephone interview. Winpak entered that market a little over a year ago and has found demand strong for the barrier bags. The project will get under way late in the year, Kuchma said from Winpak's head office in Winnipeg.
Winpak also will add thermoforming and extrusion capacity in its Portion Packaging business in Toronto and South Chicago, Ill., he said. The program is being spurred by Winpak's success in custom food packaging for high-volume contracts.
[The custom business] requires technological expertise, Kuchma said. Opportunities came our way as a result.
Winpak reported profit of US$8.9 million for the fourth quarter, ended Dec. 28, compared with profit of US$6.2 million a year earlier. Sales were US$129.7 million compared with US$126.6 million.
The company said that since about 90 percent of its sales are related to food and health-care packaging, the economic slump should hurt Winpak less than many other companies.
Avon Automotive Holdings recapitalizes
CADILLAC, MICH. Auto supplier Avon Automotive Holdings Inc. has a new financing structure and a new majority owner.
Crystal Capital Fund LP, a Boston-based private equity fund, purchased the Avon shares previously held by Red Diamond Capital and MC Capital Inc., both of New York.
Senior lenders, led by Jefferies Finance LLC, also amended their loans to provide additional funds for future production, Avon said Feb. in a 17 news release. The company also received support from major customers in Europe and North America to help with its financial structure.
This recapitalization provides us with a significantly improved balance sheet and is an integral part of our strategy to meet the challenges faced by our industry, said President and Chief Executive Officer Lee Richards.
Avon has significant new business for 2009, said William Dircks, chief financial officer.
Based in Cadillac, Avon molds plastic and rubber for air ducts, hoses and other under-the-hood parts. It has 10 plants in eight countries and had $240 million in sales in 2008.
Nicholas Plastics going out of business
ALLENDALE, MICH. Faced with what it termed a significant reduction in business, Allendale-based profile extruder Nicholas Plastics LLC will close.
The supplier to the automotive, appliance and office furniture industries was purchased in May by private equity firm Huizenga Group of Grand Rapids, Mich., in a bid to keep the company open. But in a brief statement Feb. 18, Nicholas said it has informed its 103 employees that it will close.
The firm said it will keep customers and employees informed as a plan is developed. It did not disclose details of the plan or what will happen to a plant in Monterrey, Mexico.
Nicholas posted more than $30 million in sales and had 300 employees three years ago, but has seen business drop as its customers slowed production, especially in the auto industry.
Some employees could be laid off right away, according to paperwork filed with the state of Michigan, with others losing their jobs over the next 60 days.
Auto supplier Diversified closing plant
NIXA, MO. Diversified Plastics Corp. of Nixa will close its Centralia, Mo., plant in early March as a result of slowing demand for its parts. Executives for the firm would not comment on the closure, and referred questions to a story about the plan that ran in the local Columbia (Mo.) Daily Tribune.
The Centralia plant makes foam patterns used in lost-core molding for the automotive and electronics industries, and it recently lost a client responsible for more than half of its sales, plant manager Barry Stevens noted in local reports. Centralia has 56 employees.