The sale of Adelaide-based Plastream Technologies Pty. Ltd. to U.S.-based Contech Construction Products Inc. ends a long-standing family involvement in Australia's plastics industry.
The May 11 sale marks the end of the Menzel Family Trust's 22 percent ownership of Plastream. The remainder of Plastream was 76 percent owned by Hong Kong-based Chevalier International Holdings Ltd. and 2 percent by minority shareholders, according to Menzel Family Trust Chairman Peter Buttery.
Plastream was launched in 2001 as a wholly owned subsidiary of Rib Loc Group Ltd. Rib Loc had been established in 1980 by plastics industry pioneer Stanley William Otto Menzel known as Bill to manufacture and market his patented technology, Expanda Pipe, which allows broken underground pipes to be repaired without being dug up.
Expanda Pipe uses a spiral PVC strip with locking mechanisms to stop the strip from moving during insertion into a pipe. Once the wire locking mechanism is removed, the strip expands and glue is released to seal it.
Menzel's plastics industry career began at the Adelaide-based family company, Iplex Pty. Ltd., which his father, Otto, established in 1938.
Menzel was Rib Loc CEO from 1980-94 and chairman from 1985 until not long before his death in 2001 at age 76. His son, Peter, the third generation of Menzels to be involved in the industry, succeeded him as CEO in 1995 and was in the role until he retired in 2002.
Rib Loc became a public company and listed on the Australian Stock Exchange in 1986. But the Menzel Family Trust continued to own 22 percent until 2008.
Rib Loc had embarked on an international expansion program, signing licensing agreements in the U.S., and had established a Hong Kong office to spearhead Asian market growth. In 2002, then-CEO Peter Menzel said Rib Loc would continue to invest in developing the market for Rib Loc products in the U.S., and negotiations were continuing with potential new licensees from which we expect a growth in sales and profit.
Buttery, who had been a former accountant and financial adviser to the Menzel family since 1964, was appointed a Rib Loc director in February 1999 and became chairman in March 2001. He retired as chairman in February 2009.
When the ownership changed, Buttery resigned as a director May 11. Plastream General Manager Kurt Gysin-Webster is now a director.
Rib Loc had set up Plastream Technologies to market its technology and machinery to produce steel-reinforced PE pipe, suitable for non-pressure pipe applications including drainage, irrigation and sewerage. As with Rib Loc, the Menzel Family Trust owned 22 percent.
Hong Kong-based Chevalier began buying a stake in Rib Loc including Plastream in 1997, increasing its interest to about 40 percent before making a successful takeover bid in 2004. The Menzel Family Trust retained its 22 percent Rib Loc ownership until Sekisui SPR Europe purchased Rib Loc in June 2008 and renamed it Sekisui Rib Loc Aust. Plastream was not involved in that sale.
Sekisui SPR Europe is 75 percent owned by Sekisui Chemical Corp. in Osaka, Japan; Chevalier owns 25 percent.
Gysin-Webster, who has been with Plastream for five years, said Sekisui Rib Loc Aust. still operates in the pipe-rehabilitation market.
Plastream continued developing its steel-reinforced polyethylene pipe technology and in 2006 signed its first international licensing agreement with Al-Dhafra Pipes, part of Al-Dhafra Group, based in Abu Dhabi, United Arab Emirates.
In December 2006 it signed an agreement with Contech, which gave Contech exclusive manufacturing rights in the U.S. and Canada. Contech's first line was commissioned in October 2008.
In August 2008, building products manufacturer Rocla Pty. Ltd. purchased the Australian rights to manufacture Plastream pipes.
A United Kingdom agreement was signed in 2009 with Aquaspira Ltd., based in Nelson, England, which began producing Plastream pipes under license.
Gysin-Webster said that while Plastream's sale to West Chester, Ohio-based Contech meant the end of the Menzel family involvement in the company, it is a logical progression for Contech. The company appreciates that Plastream is the next generation of technology in the pipe market and there are opportunities to go worldwide.
Strategically, they are trying to spread their wings into the international market, he said.
By buying Plastream, Contech now owns the technology. By combining Contech's exposure [to the pipe market] and our know-how on the machinery and the technology, they'll be able to improve the product, Gysin-Webster said.
The purchase price was not disclosed.
Gysin-Webster said he expects business as usual at the Adelaide headquarters, adding: We'll see how things develop. Business is worldwide. Whether you are based in the U.S. or Australia, you must go to the customer.
Buttery said he and the Menzel family are delighted Contech has shown confidence in the product and has the capital to invest in the technology to expand its global reach.
Peter Menzel said his father, as Rib Loc's founder, would have been satisfied he had achieved what he intended to do. Rib Loc and its offshoot company Plastream have both become truly global, which is what [he] always imagined.
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