Poor financial results have caught up with bioplastics maker Cereplast Inc. That, plus news from Dow Chemical and two compounding companies, are featured in this edition of Material Insights.
Seymour, Indiana-based Cereplast filed for Chapter 11 bankruptcy protection on February 10 as a move to strengthen the company's balance sheet and to gain financial flexibility as they realign operations, company officials said.
The publicly traded company has struggled in recent years, blaming slow growth in the United States and delays in new regulations that would encouraged increased demand for bioplastics in Europe.
In 2012, Cereplast lost more than 10 million dollars on sales of just under 1 million dollars. The firm also missed two debt payments that year. Sales improved in the first nine months of 2013, surpassing the 2 million dollar mark. But company's losses increased as well, moving past 30 million dollars for that nine-month period.
Cereplast was forced to file for Chapter 11 when a key lender tried to auction the company's assets. That lender now is trying to convert the Chapter 11 to a Chapter 7 liquidation, so watch Plastics News for updates to this story.
In other news, Dow Chemical Co. has fired back at an angry investor.
Midland, Mich.-based Dow said that splitting the company into two separate firms would do nothing to improve its productivity or capital allocation. Dow officials made the statement in a filing with the Securities Exchange Commission. They said their findings were the result of a recent internal evaluation.
In January, Dow investor Third Point LLC of New York had criticized the firm for what it called a poor operational track record and a history of under-delivering relative to management's guidance and expectations. Third point also suggested that Dow's petrochemicals business — including polyethylene — be spun off into a separate public company.
Finally, last week was a busy one in the compounding sector.
Private equity firm Capital Partners bought Breen Color Concentrates for an undisclosed price. Breen is based in Lambertville, New Jersey, and makes a range of color and additive concentrates based primarily on PVC and cross-linked polyethylene.
Breen President Howard DeMonte told Plastics News that the transaction will allow the firm to expand. He added that it's looking to grow by acquisition or by expanding in its home state of New Jersey.
Change also is in the air at Manner Plastics.
The compounder in McKinney, Texas, has changed its name to Manner Polymers Corp. to better reflect the changing nature of its business. Manner also will install a new production line in the first quarter of this year, along with adding 30,000 square feet of warehouse space and 3,500 square feet of office space.