Rexam expands US packaging business with acquisition

By Lorraine Heller

- Last updated on GMT

Related tags Plastic Rexam

Global packaging provider Rexam is expanding its US business,
announcing this week that it is set to acquire plastic packaging
firm Precise Technology- a move that will expand its capabilities
in both the beauty and food categories.

The purchase of the US-based company is part of Rexam's strategy to achieve further economies of scale by growing its plastic packaging business, the firm's chief executive Lars Emilson stated in his announcement of the deal.

"Precise Technology provides an excellent entry for Rexam into the growing North American pharmaceutical and healthcare packaging market and will also extend our capability for existing customers in this sector whom we have been supplying mainly in Europe up until now,"​ said Emilson.

"The company's proprietary technology in dispensing closures complements our existing closures business, while its Personal Care and Consumer Products business gives us the opportunity to strengthen our overall packaging offering. In addition to the new sales opportunities expected from broadening our customer relationships, we expect further synergies in materials purchasing and from in-house tooling manufacture,"​ he added.

The company, which recently reported moderate sales growth in its first half, had announced that for the rest of the year it would continue to build on its current position by supplementing organic growth with acquisitions.

In September the company announced it had agreed to purchase US maker of injection-moulded jars and closures Delta Plastics for £83m ($144m).

The Precise Technology acquisition, set at $257.5m and due to be completed before the end of the year, is expected to be earnings enhancing from the outset, said the company.

Rexam is one of the world's top five consumer packaging companies and has been reorganizing to focus its global operations on beverage packaging in metal, glass and plastic. The group has operations in 22 countries. The company has made a series of acquisitions over the past two years and says it is looking at other "opportunities"​ for growth.

The company's beauty business, which is one of the mainstays of the plastics packaging division, has continued its "generally buoyant"​ performance, as sales of pumps continued to prove particularly strong.

Currently beauty packaging products are manufactured at 14 plants in Europe, Asia and the Americas - with Brazil, China and Indonesia accounting for its manufacturing interests in the developing markets.

This is in line with the company's increasing focus on emerging markets, which now account for nearly 15 per cent of the groups packaging operations. Currently its core emerging markets are Brazil, Russia and China.

Rexam's beauty packaging products include spray samplers, lipstick cases, fragrance closures, compacts, a series of closures as well as fragrance dispensing systems that center around fine-mist pumps.

Pittsburgh- based Precise Technology, which reported sales last year of $294 million, serves the healthcare, personal care, and food and beverage markets, providing a variety of injection-moulded plastic packaging. These include pharmaceutical and medical components and devices, and dispensing closures and containers.

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