KlÃ¶ckner Buys VPI Mirrex's PVC Film Business
Klöckner Pentaplast of America Inc. (Gordonsville, VA) has agreed to acquire the rigid polyvinyl chloride (PVC) film business of VPI Mirrex LLC (Sheboygan, WI).
VPI Mirrex announced it is leaving that business and will close its Delaware City, DE, plant, which has approximately 200 people. The calendering facility makes blister and clamshell packaging for pharmaceuticals and medical devices, among other applications.
Klöckner is acquiring all manufacturing assets of the Delaware City facility, as well as proprietary product formulations and trade names. Financial terms of the sale were not disclosed.
VPI Mirrex will operate the Delaware City plant under a sup-ply agreement with Klöckner until mid-2003. Then the plant will be shut down. "VPI Mirrex has four calender lines, and at least one of these—the newest line that manufactures mainly the pharmaceutical packaging films—will be relocated to our facility in Rural Retreat, VA," said Michael Tubridy, Klöckner's executive vice president. The target completion date is February 2004. Tubridy added, "The remaining calenders are older machines with some recent upgrades that will provide useful retrofits within Klöckner facilities, but the greater part of the residual capacity will be replaced with new technology."
VPI Mirrex's PVC products will enhance Klöckner's offerings, Tubridy said. "Mirrex has always had excellent products, and they are complementary to our line," he said. "PVC films are formulated to achieve a balance of performance requirements, and some customers have a preference for the Mirrex line while others prefer the Klöck-ner line. We are committed to support the expanded product of- ferings this transaction provides, even as we continue to develop innovative new products to meet the changing needs of our customers." The move will give Klöckner a broader range of offerings, not only for stand-alone PVC blister films, but also for higher-barrier blister films of which PVC is a component, he said.
VPI Mirrex said it had initially tried to sell the Delaware City operation so that it could be kept intact but could only get an acceptable offer for selling off its assets.
"Hindsight tells us that our decision to acquire the PVC rigid films business in 1997 was flawed; we have not been able to realize anticipated synergies between this oper-ation and our other businesses," said Greg Mickelson, president of VPI Mirrex. "This division has suffered significant losses in the last few years. Despite our continued investments in the operation and the dedication and work of our employees, we do not envision a successful turnaround that will achieve sustained profitability."
All but one member of the VPI Mirrex sales and marketing team has accepted Klöckner employment offers, Tubridy said. "We look forward to working together with the VPI Mirrex management team to effect an optimal transition plan. It will be a collaborative effort, and our top priority is to make the changeover as seamless as possible to customers of both VPI Mirrex and Klöckner Pentaplast."