Updated July 9 to correct currency conversions: IPL Plastics Inc. has revealed an ambitious expansion program for packaging in the final prospectus for its initial public stock offering.
IPL Plastics, recently formed by the merger of injection molding businesses in North America and the United Kingdom, said it is spending US$80.3 million to add injection molding machines and related machinery at eight of its 14 global manufacturing locations. Projects were begun in 2016 and most are partially completed and in the commissioning stage.
In its prospectus, IPL Plastics states it is adding 30 injection molding machines in North America, where it has been running 168 injection presses before recent expansions. The biggest single program is expansion of its Forsyth, Ga., operation. IPL is spending US$18.9 million in Forsyth to add eight injection presses that will lower production costs due to modernized technology. The company said the project will help it gain access to a big portion of the U.S. market and population. The plant focuses on large format packaging such as rigid bulk containers and environmental products like large, wheeled containers for curbside waste collection.
The company's biggest injection molding machinery installations are in Saint-Damien, Quebec, and Edmundston, New Brunswick, where it has been running 40 and 44 injection presses, respectively. The two operations are the former IPL Inc. plants.
In addition to large format packaging and environmental solutions, IPL's other business units are consumer packaging solutions, and returnable packaging solutions. The company targets internal growth for all three business units at rates higher than the markets they participate in.
IPL Plastics is being listed on the Toronto Stock Exchange in an IPO set to close on June 28. It is issuing 13.2 million common shares at a price of C$13.50 (US$9.90) per share for total gross proceeds of C$178.2 million (US$133.7 million). A company spokesman said in an interview that the issue was fully subscribed as of June 27. The firm has headquarters in Montreal and Dublin, Ireland.
Other expansions in North America are underway at Edmundston; Lee's Summit, Mo.; Saint-Damien, and Shelbyville, Ky. The latter operation makes returnable bulk packaging for agricultural goods and automotive assembly operations. Capacity at that site also is being expanded for MacroTrac products such as outdoor flooring made from interlocking plastic components. IPL Plastics is spending US$10 million this year in Shelbyville to add three injection presses and other machinery.
In the United Kingdom, IPL is adding 14 injection presses at locations in Hull and Tamworth, England. Hull is boosting production capacity and modernizing product lines for large format packaging and environmental containers. Tamworth is increasing automation and production capacity for the company's LF&E products.
In Cork, Ireland, IPL has completed an expansion into food and consumer packaging in Europe. The US$9.8 million program was designed to develop a new food-grade manufacturing platform and involved the addition of nine injection presses.
IPL Plastics reported sales of US$148.3 million for its first quarter ended March 31. The 31.7 percent rise in sales compared with a year ago was largely due to the acquisition of Macro Plastics Inc. of Fairfield, Calif. LF&E accounted for 51 percent of sales with North America representing about two-thirds of the volume. Consumer packaging was 30 percent of sales and three quarters of that occurred in North America. Returnable packaging accounted for about 15 percent of sales in the period.
IPL claims to be the leading supplier of in-mold labeled packaging and bulk plastic containers in North America. It also says it is the third largest plastic pail manufacturer in North America and the largest environmental container manufacturer in Canada and the United Kingdom. Half of the firm's products contribute to the “circular economy.”
IPL Plastics mainly competes in rigid plastics packaging markets, which are pegged at about US$150 million globally, or about 54 percent of the total global plastic packaging market, by market researcher Smithers Pira of Leatherhead, England. IPL Plastics also cites Smithers Pira for its global rigid plastics packaging growth forecast of 3.4 percent per year between 2017 and 2022. Rigid packaging demand in North America and Western Europe is forecast to lag that pace. Those two markets combined will grow 1.9 percent a year in the period and reach US$41 billion and US$34 billion, respectively.
Outside North America and Europe, IPL Plastics runs a factory in Shanghai, with 18 injection presses and pad printing capability.
