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Pact buys two Reynolds companies in Asia

PLASTICS NEWS

  Bundy

Plastic packaging giant Pact Group Holdings Ltd. is buying two Asian packaging companies from Reynolds Group Holdings Ltd.

Melbourne, Australia-based, publicly listed Pact is paying A$142 million (US$108 million) for Lake Forest, Ill.-based Reynolds Group's Asian closure businesses and a rigid packaging business in China.

The companies are Closure Systems International in Asia and Graham Packaging Guangzhou Co. Ltd., which manufactures bottles and closures in Guangzhou.

The sale does not include a separate Graham Packaging facility in Taizhou, China.

Documents filed with the Australian Stock Exchange show the businesses comprise the vast majority of Reynolds Group's Asian packaging operations, except those in Japan.

The CSI plants are in Tianjin and Guangzhou in China; Calamba City in the Philippines; Boeun-gun, South Korea; Bangalore, India; and Hetauda, Nepal. The sale includes a regional headquarters and sales and marketing operation in Hong Kong.

Reynolds Group operates globally, but has major operations in New Zealand and a principal office in Auckland.

Pact Chairman Raphael Geminder also said the company is buying Forrestvale, Australia-based plastic drum refurbisher ECP Industries for A$11.7 million

Geminder said at the company's Nov. 15 annual meeting: "The Asian acquisitions will establish a platform to drive growth, delivering scale to existing operations and enhancing our position in the region. ECP Industries is an attractive business, strongly aligned with our existing sustainability businesses in Australia and New Zealand."

Pact Managing Director and CEO Malcolm Bundey added that buying the Reynolds operations in Asia "will deliver a meaningful shift in our geographic diversity."

He said the investments will continue to strengthen the company and provide "a robust platform" for long-term sustainable growth.

Pact's Asian business will move from 3 percent to 12 percent of sales, an increase from about A$50 million to A$200 million. Pact Group already had three plastics manufacturing plants in China, and joint-venture plants in the Philippines, Thailand and Indonesia.

Bundey said the acquisitions will make Pact "the regional leader in rigid bottles and closures" and added "significant technical expertise and [intellectual property]" to the company.

The acquisitions will increase Pact's employee count by 750. It currently employs more than 4,000.

Pact said CSI Asia is "a leader in plastic closure design, manufacturing and high-speed capping equipment." GPG blow molds high density polyethylene bottles.

Pact expects the sale to finalize by mid-March.

 

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