MEXICO CITY — Rotational molded water storage tank maker Grupo Rotoplas SAB de CV has gone public as it seeks to expand in the United States, Brazil and its home market, Mexico.
Through an initial public offering on the Mexican Stock Exchange of 125.4 million shares — about a quarter of its stock — Rotoplas was hoping to raise 3.636 billion pesos ($250 million) after setting the price on Dec. 9 at 29 pesos per share.
By mid-morning Dec. 10 — the first day of trading in the Rotoplas stock — the price was up 3.9 percent at 30.15 pesos per share. However, it fell back before midday to 30.01 pesos a share. The company's stock symbol is AGUA.
Explaining the reasoning behind the IPO, Rotoplas wrote on its website that it will use the funds to expand in the United States, where it reportedly started unspecified operations in Arizona, California and Nevada in September. It added that it also wants to “consolidate integral solutions” in Mexico and Brazil and have the funding available for any potential acquisitions.
“[Excessive] water usage, drought and extreme conditions have increased a shortage of water in the United States,” it wrote, adding that Brazil is “currently undergoing its worst drought in 40 years, with several cities, including São Paulo, in danger of running out of water altogether.”
Founded in Mexico City, its current base, in 1978, Rotoplas manufactures polyethylene water storage tanks, cisterns, industrial tanks and accessories. It also makes hydraulic pumps as well as pipes and water filters, among other products.
In the past 12 months Rotoplas's pre-tax sales totaled 6.4 billion pesos ($445.9 million). It operates 25 plants and employs 2,600 in 12 Latin American countries.
Rotoplas's Chief Financial Officer Mario Antonio Romero Orozco could not be reached for comment.
In 2006, Rotoplas had a key role in a project that involved molding more than 1,600 water tanks for the Pierre Auger Cosmic Ray Observatory in western Argentina. Rotoplas supplied about 800 tanks, each with a capacity of 3,170 gallons, a diameter of 3.9 yards and a height of 5.6 feet.