Bemis Co. Inc. has expanded its rigid packaging business in South America through two acquisitions.
Bemis bought three plants in Brazil and one in Argentina from HuhtamÃ¤ki Oyj. They join Bemis' nine plants in Brazil and one in Argentina.
The Neenah, Wis., firm paid about $43 million for the former HuhtamÃ¤ki operations. They generated sales of about $85.8 million in 2008. The plants make extruded sheet, yogurt cups, drink cups, dairy tubs and similar packaging using thermoforming and injection molding. Main markets are dairy and food service. They employ a total of about 640.
This business will complement our existing South American operations, Bemis President and CEO Henry Theisen, said in a June 3 news release.
The deal boosts Bemis' sales in South America by more than 10 percent, according to Melanie Miller, Bemis vice president and treasurer. Bemis makes dairy tubs, folding cartons and flexible packaging in South America and claims to be the biggest packaging firm on that continent, Miller said in a telephone interview.
Bemis sales in South America for 2008 were $582.4 million, including rigid packaging, flexibles, labels and folding cartons. About half the sales were flexible packaging, Miller estimated.
Bemis subsidiary Dixie Toga SA and Dixie subsidiary American Plast SA bought the Brazilian and Argentinian businesses, respectively. Bemis acquired Dixie Toga of São Paulo, Brazil, in 2005, Miller said. American Plast is based in Buenos Aires, Argentina.
HuhtamÃ¤ki said last fall it was conducting a strategic review of its rigid packaging operations around the globe in favor of its core businesses of flexible packaging and molded fiber packaging.
This sale represents an excellent outcome to the review of our rigid plastic consumer goods business in South America and supports the strategy execution, HuhtamÃ¤ki CEO Jukka Moisio said in a news release.
We will continue to review the remaining rigid plastic consumer goods operations in Europe and in Australia, Moisio noted. In South America, we will continue to operate our flexibles and rough molded fiber packaging units.
The businesses sold were HuhtamÃ¤ki Plasticos Rigidos Brasil Ltda. and HuhtamÃ¤ki Argentina SA. The former's plants are in Pinhais, Recife and Valinhos, Brazil, while the latter's plant is in Garin, Argentina.
Bemis paid $32.3 million in cash on hand, $1.9 million in assumed debt, and a $8.8 million note payable to HuhtamÃ¤ki due May 31, 2010.