Chinese cosmetics packaging molder HCP Holdings Inc. is seeking outside funding for a possible acquisition in Europe.
The company has shown heightened interest in general European expansion, according to recent interviews with company executives.
Reuters news service reported Nov. 14 that Morgan Stanley Private Equity Asia, based in Hong Kong, was in talks to buy a majority stake in HCP. That report cited unnamed sources, but an HCP official downplayed it and said family-owned HCP sought out Morgan Stanley for consultations about a possible European investment.
“We have been seeking Morgan Stanley for consulting purposes and talks of possibly borrowing a … substantial amount of money for an acquisition on a European packaging firm,” HCP account manager Jack Chen said in a Nov. 15 email. Chen — son of HCP President and CEO Jeff Chen — declined to identify the possible acquisition target.
New York-based Morgan Stanley's Hong Kong office did not respond to a request for comment.
Shanghai-based HCP, one of the larger firms in the fragmented plastics packaging market for cosmetics, has manufacturing in China, the U.S. and Mexico.
Its sales have grown rapidly in recent years, from $102 million in 2007, to $160 million last year, with projections for $185 million this year, the firm said. Industry officials estimate it has about 3 percent of the global market for cosmetics plastic packaging.
In an earlier interview Nov. 10 at the Cosmoprof Asia beauty trade fair in Hong Kong, Jeff Chen said HCP was looking to establish an Eastern European factory. He said the firm was considering spending at least $12 million to set up a plant there that would let it shorten lead times — which is becoming more important to the global cosmetics industry.
The firm counts cosmetics majors like L'Oréal, Maybelline, and Procter & Gamble, which owns CoverGirl, among its customers.
Jeff Chen said then that HCP expected to make a decision on the Eastern European site early this year.
Also, HCP is expanding its Reynosa, Mexico, operation, investing $6 million in metalizing operations and adding a few injection presses, giving it more than 20 there, he said.
The company also is adding metal pressing and anodizing operations at its factory in Huai'an, China.
HCP was started in 1980 in Taiwan by its current chairwoman, Shen Fang Chen, and the company is mainly controlled by the Chen family, under the leadership of Jeff Chen, according to the firm's website.
Morgan Stanley has been active in China's plastics sector. In August, its Private Equity Asia unit invested $100 million in Harbin, China-based China XD Plastics Co. Ltd., a compounder specializing in automotive materials.