Updated: Rapid’s Swedish operation to restructure finances

Rapid Granulator AB (Bredyard, Sweden) was granted a suspension of old debts by the District Court of Jönköping Sweden on Nov. 2, allowing a reconstruction procedure that under Swedish law permits the company to continue its business. Rapid Group CEO Rolf Gren stressed the move is not a declaration of bankruptcy, saying his company entered the process voluntarily and in full cooperation with its Swedish bank partner, Nordea. “This reconstruction process will lead to a stronger company that will be able to serve the market even better,” Gren said. Gren told PlasticsToday that the reconstruction is expected to be completed by early next year. At this stage, no workers have been laid off, but Gren said there are plans for a “minor layoff” going forward.

Gren said that the global financial crisis, and Swedish labor law, ultimately undermined his company, in spite of a pick up in business in recent months and efforts to reduce costs, specifically with cuts to travel and staff. “Unlike some of our competitors in other parts of Europe,” Gren said, “we are not able to lay off employees on a temporary basis. Therefore, this reconstruction procedure is our only realistic option.”

The company had been on an expansion kick of late, announcing at NPE2009 the acquisition of Shanghai-based Avian Machinery. A company it said was the second-largest manufacturer of granulator machinery in Asia. At last year’s Chinaplas, Rapid announced it would start making its 150 series machines in China. Gren said its current issues are not tied to these expansions. “Unfortunately we have seen that some media try to tie the reconstruction to our Asian operation,” Gren said, “which is completely wrong but instead we see that it took longer then expected to get the benefit out of our Asian set up, and now, Asia is fast becoming the future market for us.”

In May of last year, Rapid and its International Plastics Equipment Group (IPEG; Cranberry Township, PA) sister firm, auxiliary supplier Conair (Franklin, PA), announced they would mirror the organizational model applied in their new Chinese production plants, with the sister firms consolidating North American and European manufacturing efforts. Gren said at this time, however, there are no plans to manufacture Conair equipment at Bredyard, with that facility to remain focused on granulators. The restructuring release said the latest move would only affect the Swedish firm and not any of its partners. — [email protected]