A private investment firm that's already shown a keen interest on the materials side of the plastics business is now diving into industrial blow molding.
Beaconhouse Capital Management LLC has acquired the Willowbrook, Ill., operations of The Plastics Group Inc., rescuing the facility from closure. And the Chatham, N.J.-based investment firm sees that facility as a foundation for continued expansion into the processing business.
TPG had been in financial trouble and announced plans to close sites in both Willowbrook and Fremont, Ohio, early this year.
Beaconhouse was in earlier talks with the company but could not reach a deal with the previous owners before a decision was made to close. But the investment firm eventually was able to strike a deal with lenders to purchase the Willowbrook site. It also purchased some equipment from Fremont, which did close its doors, through a separate equipment sale
These days, TPG President Saquib Toor said the Willowbrook site has been stabilized under new ownership and is blow molding between 15,000 and 20,000 gasoline cans each day. The operation also makes fuel tanks for portable equipment such as lawn mowers and snow blowers as well as all-terrain vehicles.
"It's one of the largest manufacturers of gas cans and fuel systems in the United States. We manufacture between 3 [million] and 4 million cans per year that's being sold to big box retailers, home improvement centers as well as going through distribution to [convenience] stores," Toor said.
The gas cans are marketed under the Briggs & Stratton and Garage Boss brands.
TPG has about 20 lines in Willowbrook, with more than half currently in production. TPG is hunting for business opportunities to restart eight idle lines.
"We will be looking to fill up those lines in the next 18 to 24 months while continuing to build up our portable gas can as well as our fuel system business," Toor said.
"We're also open to additional acquisitions. We would be interested in other blow molding facilities that could either leverage our unused capacity to help those customers as well as other converting technologies, like injection molding, so we can find opportunities with our existing customers," he said.
The company has been under new ownership since Sept. 1, but Beaconhouse had been operating the site since May as the two sides finalized the sale.
Some 60 workers are currently employed by the company, and Chief Financial Officer Pavel Smyshlyaev expects that number to rise over time.
"We have rehired some of the employees," he said. "We continue to do so on an opportunistic basis."
The average tenure of a Willowbrook employee is 18 years, and the new owners see value in retaining these long-time employees. "We have very little turnover," Smyshlyaev said. "We worked hard to save the livelihood for 60 families and we really appreciate our employees."
Toor said Beaconhouse is bullish on TPG for a few reasons, including a new spout that has been under development by the company that he believes will help drive new sales.
"We saw a lot of strong operating people at the plant level. We saw a lot of R&D dollars that were spent on the spout and just needed a little more expertise to take it to market and get all of the approvals. On top of that, we saw additional cost savings opportunities given that we understand polymers and plastics from a sourcing side," Toor said.
Beaconhouse also owns Alterra Holdings LLC, which describes itself as a "fast-growing compounder with a core expertise in technical plastics compounding, elastomers and R&D."
"There are a lot of cost savings opportunities based on our background in plastics," Toor said.
Freeing up Willowbrook from the overhead of also managing the Ohio facility also helps improve finances at the company, the men said. That site made larger blow molded items such as kayaks and bed components. The location had two key contracts in the bedding industry, but lost one contract and had difficulty managing production.
Key products coming out of Willowbrook include 1-, 2- and 5-gallon gas cans, 5-gallon kerosene cans and 5-gallon diesel fuel cans. The company also does some limited injection molding of drain pans and funnels.
The Briggs & Stratton name is licensed, but TPG owns the Garage Boss brand. And that's an important aspect of the business, Smyshlyaev said.
"We are masters of our own destiny in our own sense. We are not manufacturing behind the scenes for somebody else," he said. "We actually do have a brand name. That's really exciting for us. We like going into stores and seeing our can on the shelf. It makes us proud."
