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February 1, 2008

10 Min Read
Industry News & Analysis

Adcuram repeals sale of Battenfeld, but firm’s future still shaky

Austrian injection molding machine manufacturer Battenfeld Kunststoffmaschinen (BUK; Kottingbrunn) filed for bankruptcy in early January. In December owner Adcuram (Munich, Germany) had sold the company to a phantom London outfit formed in November 2007, but canceled the sale on January 4 after the bankruptcy filing and the outcry of Austrian politicians caught up in elections, who were threatening Adcuram with lawsuits for its treatment of BUK, the area’s largest employer.

Adcuram acquired Battenfeld, which had been unprofitable for many years, in October 2006 with the intent to execute a turnaround. In summer 2007 it separated the still-solvent after-sales/spare parts business from the machinery manufacturing business. Former Engel executive Georg Tinschert was brought in on December 1, 2007 to manage BUK.

Adcuram’s reversal of its sale did not change the bankruptcy filing. Adcuram officials blame Batteneld’s problems on past management decisions, its high cost structure, and the hyper-competitive market. Adcuram says it had to sink more than ?15 million into Battenfeld during 2007, a period, it accurately notes, in which many plastics machinery manufacturers were reporting record, or near-record, revenues.

The story was still developing at press time, but the firm’s fortunes took at least a temporary turn for the better after a lengthy meeting on Friday, January 11, between Adcuram officials, regional politicians, and the court-appointed liquidator. As a result of the meeting, and with financial support from the local government, the firm is at least guaranteed to stay on its feet until April 1, the scheduled date for the first bankruptcy hearing, as an Austrian bank has freed euro 15 million for BUK with repayment guaranteed upon the firm’s sale. The governmental intervention meant the affair needed approval in Brussels at the European union.

Adcuram officials are expected to use the time to try to find an appropriate buyer.

Automotive manufacturing accelerates in Russia

In December, Toyota, Mitsubishi, and Hyundai all announced plans to add vehicle manufacturing in Russia, joining fellow OEMs Volkswagen and Nissan, which announced their own investments in 2006. Toyota launched production of its Camry sedan at a new subsidiary in the Shushary District of St. Petersburg. Initial production capacity for the facility, which opened at the end of 2007, is 50,000 cars/yr.

Mitsubishi Motors is doing a feasibility study on local production in Russia. Meanwhile, St. Petersburg will also serve as the location of Hyundai’s first Russian production facility, with construction on a new $400 million plant set to start in June 2008.

According to a report from Ernst & Young, automotive manufacturing capacity in Russia is expected to eclipse 600,000 units/yr, and by 2010 will reach 800,000 to 900,000 units, with a total investment of more than $2 billion.

Alcoa bows out of plastics packaging

Aluminum supplier Alcoa sold its packaging and consumer businesses to New Zealand’s Rank Group Ltd. for $2.7 billion in cash. The businesses, which generated $3.2 billion in revenue in 2006, included Closure Systems International, which compression and injection molds closures; Consumer Products, which includes Reynolds Wrap foil, wraps, and bags; and Flexible Packaging, which makes laminated, printed, and extruded films for pouches, blister packaging, shrink labels, and foil lidding. Rank’s businesses include several in packaging, with portfolio companies like Carter Holt Harvey, SIG Holding, and Evergreen Packaging.

PVC, using ethylene derived from sugar cane

Solvay Indupa (Buenos Aires, Argentina), one of the largest polyvinyl chloride (PVC) suppliers in the Mercosur region, will invest a further $135 million at its PVC plant in Santo Andre, Brazil. This second stage of expansion, following the one in 2006, will include an integrated plant to produce ethylene with ethanol originating from sugar cane. Ethylene and chlorine are the two main feedstocks needed to manufacture PVC.

Solvay says the Santo Andre facility, when operating, will be the first industrial project in the Americas implementing renewable resources for the production of PVC.

Basell expanding in Caribbean and China

Polyolefins supplier Basell (Hoofddorp, Netherlands), with the National Gas Company of Trinidad and Tobago (NGC) and the National Energy Corp. of Trinidad and Tobago (NEC), will build and operate an integrated, 450,000-tonnes/yr polypropylene (PP) facility set to come into operation in 2012 in the island country.

Basell also plans to build its second PP compounding facility in China. This one will be located near Guangzhou, and from September of this year will supply some 15,000 tonnes/yr of compounds to China’s automotive and appliance industries. The company already has a PP compounding plant at Suzhou.

Sears gives PVC the boot

Sears Holdings Corp. (Hoffman Estates, IL), the fourth-largest U.S. retailer, with more than $50 billion in annual revenues and about 3800 stores in North America, including the Sears and Kmart chains, intends to phase out the use of polyvinyl chloride (PVC) in its packaging and merchandise. The company cited “the potential health and environmental risks tied to the manufacture, use and disposal of PVC” as reasons for the shift.

Sears wants to “identify safer, more sustainable and cost-effective alternatives to PVC and incorporate them into the design and manufacturing process for private label merchandise and packaging,” and set long-term goals for using biobased plastics, those with higher recycled content, and those that can be reused, recycled, or composted.

Saint-Gobain gets freeglass; Schefenacker gets new name

The German operations of Saint-Gobain Sekurit (Paris, France), one of the world’s largest suppliers of automotive glass, acquired partner Schefenacker GmbH’s stake in the two firms’ freeglass joint venture. freeglass (Schwaikheim, Germany), formed in 2001, was among the first processors to commercially market injection molded polycarbonate window glazing. Terms of the purchase were not revealed. According to Sekurit, freeglass has 130 employees and generates sales of about euro 27 million.

Soon after the deal, automotive rear mirrors manufacturer Schefenacker plc (Portchester, England) changed its name to Visiocorp plc. Schefenacker German HoldCo GmbH (Schwaikheim, Germany), an automotive lighting supplier that was formerly part of the newly named Visiocorp, is now on its own, being restructured, and, starting this month, sports a new name: odel-Automotive Signal Lights.

Indorama buys Eastman assets

Polyethylene terephthalate supplier and processor Indorama Polymers Public Ltd. (Indorama; Bangkok, Thailand) acquired the European PET production assets of Eastman Chemical Co. (Kingsport, TN) for ?65 million. The acquisition includes a 200,000-tonne/yr PET production facility in Rotterdam, the Netherlands, and the purchase of a 155,000-tonne/yr facility in Workington, England. The facilities will be integrated into Indorama subsidiary Indorama Polymers Europe, which last year started the largest PET supply plant in Europe, in Klaipeda, Lithuania.

European PET demand now exceeds supply, giving Indorama reason to believe it can improve the profitability of the acquisitions. For Eastman, the sale continues divestment of its overseas PET production assets. It recently completed the previously announced sale of its PET production assets in Mexico and Argentina to Mexico’s Alfa.

In 2007 Indorama raised capacity at its StarPet facility in Asheboro, NC to 225,000 tonne/yr for both bottle-grade and amorphous PET. Another site, in Decatur, Alabama, will open this year with another 432,000-tonnes/yr.

Cereplast to expand bioplastics production 10-fold

Cereplast (Hawthorne, CA) will make the leap from batch supplier of compostable, renewable-based resins, to possibly the leading renewable plastics player, expanding its current production capacity of 50 million lb at its lone California manufacturing site to 500 million lb with a new 12-acre site in Seymour, IN. According to Cereplast CEO Frederic Scheer, the company will invest $7.35 million to equip an existing site in Indiana, which currently is occupied by a 105,000-ft² building. Cereplast will add rail capabilities to the site to handle material transport. record, or near-record, revenues.

The story was still developing at press time, but the firm’s fortunes took at least a temporary turn for the better after a lengthy meeting on Friday, January 11, between Adcuram officials, regional politicians, and the court-appointed liquidator. As a result of the meeting, and with financial support from the local government, the firm is at least guaranteed to stay on its feet until April 1, the scheduled date for the first bankruptcy hearing, as an Austrian bank has freed euro 15 million for BUK with repayment guaranteed upon the firm’s sale. The governmental intervention meant the affair needed approval in Brussels at the European union.

Adcuram officials are expected to use the time to try to find an appropriate buyer.

Berry captures Captive

Berry Plastics (Evansville, IN) purchased bottle maker and closure molder Captive Plastics Inc. (Piscataway, NJ) for $500 million from First Atlantic Capital Ltd., adding 13 plants spread across the U.S. Days prior, Berry acquired cap and closure molder MAC Closures Inc. MAC, which was owned by Novacap Investments Inc., operates two manufacturing sites in Canada.

Many sources required

Only 45% of China’s growing demand for injection molding machinery is fulfilled by the growing number of domestic machinery suppliers, according to the “China Injection Molding Machine Market Report 2007.” The eastern provinces of Guangdong, Jiangsu, and Shandong account for 88% of China’s total injection molding machine manufacturing industry.

Menzolit in China move

One of the world’s largest suppliers of sheet molding and bulk molding compounds, Menzolit (Bretten, Germany), says it will locate its next facility in Jinshan, China, not far from Shanghai, with production starting later this year.

ColorMatrix in Suzhou

Liquid colorant and additive concentrates supplier ColorMatrix (Cleveland, OH) has expanded into China, with its first manufacturing and office facility there, in Suzhou. The firm has had a sales office in Hong Kong since 1995.

[ On the record ]

“If they have a question, then I have a chance.” Steven Chang, sales representative at Taiwanese moldmaker Race Mold, on the visitors to his stand at December’s Euromold trade show.

“These medical OEMs are spending millions, or in some cases, hundreds of millions of dollars, and they don’t want to see their intellectual property compromised.” Mark Riemer, VP sales and marketing at Molded Rubber and Plastics Corp., on one reason higher-end medical is staying local vs. going offshore.

“A good percentage of our business could be termed crisis production management.” Steve Hall, director of moldmaker Protool Manufacturing (Havant, England), which has opted to become a 24/7 operation.

“If you’re not in people’s face every doggone day, then someone else will be.” David Slick Sr., CEO of medical device manufacturer Command Medical, on the importance of frequent contact with customers.

David Bertke (top) and Guy Moilliet will split responsibility for Milacron’s machine operations on continental lines: Bertke in North America, and Moilliet in Europe.

Changing of the guard at Milacron

Milacron (Cincinnati, OH) has named David Bertke and Guy Moilliet to lead North American and European machinery operations, respectively, as Robert Simpson, who joined the firm in late 2006 and formerly oversaw those technologies in both regions, left the company. Bertke and Moilliet will add the new machinery businesses to their current responsibilities; former positions won’t be backfilled.

Bertke, who’s been with Milacron for 35 years, most recently acting as general manager of its global extrusion business, will now be VP machinery technologies North America. Moilliet, most recently managing director of Milacron’s European injection molding business, will now also be responsible for the company’s blowmolding machinery and extruder operations in Europe.

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