RPC Group plc is looking at setting up a manufacturing facility in Brazil as part of its goal to continue building a “meaningful presence” beyond Europe.
Europe accounts for 86 percent of RPC's 1.7 billion pound ($2.67 billion) in annual sales, but the group, which currently has no manufacturing activities in South America, has made no secret of its desire to move into new and growing markets.
Speaking to PRW at a press event organized by the company in London, RPC's chief executive Pim Vervaat said the firm had been in talks with a potential partner in Brazil, but these had not resulted in a deal.
However, he said that while it was still in talks with other potential partners the group was now looking at green-field sites in an unnamed location in the Latin American country.
“I cannot say where it is, not what it would involve, manufacturing-wise, but if it happens it will take two years to set up. There is a strong demand for our products but [if we were to set up there] we would need to be very focused.
“Just because we have been successful with acquisitions in places like Europe and China does not mean we would automatically be that way in South America.”
Vervaat also spoke about the progress of the group's foray into China with its $430 million acquisition a year ago of Ace Corp., the Hong Kong-based mold maker and injection molder.
“Benny [Nielsen, technical director at Superfos] had been working with the Ace team for a number of years on mold supplies. What Ace produces is as good as any mold coming out of Switzerland or Germany.
“Then Jack [Yeung, Ace's chief executive] came to us, saying the family wanted an exit from the business and were we interested? We saw them a couple of times, in 2011 and 2013, and we saw how the company had progressed.
“We were very impressed with Ace's development in that time — its tool-making capability and its injection molding of complex parts are as good as anything you'll find anywhere in Europe — and with the management team. And so we did the deal.”
Vervaat said RPC planned to grow Ace's non-packaging activity and leverage both parties' strengths. “Ace is our platform for growth in Asia. It's a quality business,” he added.
Speaking at the press event, Yeung said his company had never operated on the basis of a low price offer, “which is unique in China,” and becoming a part of RPC had opened a lot of doors to the firm.
“We can use the resources of RPC and its buying power to go after business we couldn't win before.
“The growth of China and the movement of a further 350 million people into its cities in the next 10 to 15 years means there will be a radical change in consumers' lifestyles.
“And as these people grow wealthier, so they will want higher-value products. We can give RPC the critical mass it needs in these areas and go after those opportunities.”
Yeung also revealed that RPC had recently opened a packaging sales office in Shanghai. “This is a big step for us,” he added.
The press event covered the range of the RPC product portfolio and featured presentations on its technical components business, personal care and healthcare products, organic growth profile and activities outside Europe, including M&H Plastics in the US.
