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Packager moves: Stanelco buys Biotec; Berry buys Kerr

07-Jun-2005

UK-based Stanelco said yesterday it has acquired Biotec, a company based in Germany that makes starch-based polymer packaging for the food and pharmaceutical industries.

Stanelco , which markets a method to seal plastic food-tray packages using radio frequency technology, said the $25m (€20m) purchase fromE. Khashoggi Industries wouldgive it access to Biotec's proprietary pharmaceutical grade film. The film can be used to replace conventional polymers such as gelatine.

Stanelco currently uses Biotec's starch products for making food trays, air pillows and edible packaging. Biotec's film has a cost base of between US$5 to US$8 per kilogramme, a cheaper alternative to gelatine and othermaterials.

 

"Biotec is one of the world's leading exponents of starch technology and has a considerable intellectual property portfolio, including many patents, extending to uses in pharmaceutical and edibleapplications," Stanelco said in a press release. "It also has ranges of products that are ready for commercialisation within the food and beverage industries."

 

Biotec portfolio of products includes thermoplastic starch, which can be substituted for petrochemical based plastic packaging. Stanelco said its radio frequency sealing technology can be used to process starch polymers without the degradation causedby other methods such as thermal processing.

 

Stanelco's chief executive officer, Ian Balchin, said the purchase will help the company develop alternatives to petroleum-based packaging.

 

Currently APET/PE sheet for making food trays costs about £1.70 (€2.5) per kilo. Stanelco hopes to bring the price of the Biotec packaging alternative down to about £1.80 (€2.67) per kilo, hesaid.

 

"I believe the acquisition positions the Stanelco group to take advantage of this rapidly expanding market place and specifically it will enable Stanelco to offer its product ranges that contain starch product at up to20 per cent less than is currently available," Balchin said.

 

The acquisition also creates a further barrier to entry for any company hoping to compete with Stanelco's radio frequency sealing technology, he said. Biotec's managing director, Harald Schmidt, will have a three year service contract with Stanelco and will remain as managing director ofBiotec.

 

Biotec also makes polymers for injection moulding and film extrusion used for packaging and disposable cutlery. Last year Stanelco acquired the assets of Adept Polymers, a water-soluble polymer manufacturer.

 

Balchin said that with the rise in oil prices, the cost of petroleum-based packaging materials is increasing faster than alternatives such as starch.

 

As reported previously in FoodProductionDaily.com Stanelco use of radio frequency technology to seal plastic tray packages of perishable food was launched in the UK in a trial partnership with the ASDA supermarket chain. In May the company opened an office in Orlando, Florida in a bid to target ASDA's parent company, Wal-Mart, along with Albertson's, Kroger's and Safeway.

 

Balchin reported yesterday that the second trial for the Greenseal technology with ASDA has moved into the retail phase, having passed the shelf-life test. The third and final trial begins this week. As announcedon 23 May, Stanelco has taken its first formal commercial order from an ASDA supplier.

 

Berry Plastics buys Kerr

 

Berry Plastics has completed a previously announced acquisition of Kerr Group for $445m (€363m) as part of a strategy to boost its position in the plastic packagingmarket in the US and internationally.

 

With the purchase Kerr acquires Berry's 18 plants, including ones based in Milan, Mexico City, and Norwich, England. Kerr owns nine plants in the US. Kerr said the expanded network will give itscustomers a more improved service. The combined business will also allow Berry to offer packaging closure products across all major closure categories, the company said.

 

Berry Plastics manufactures products such as injection-molded and thermoformed plastic open-top containers, aerosol overcaps, closures and drink cups. Kerr has been held by private equity firm Fremont Partnerssince 1997. Berry Plastics is held by Goldman Sachs Capital Partners and JP Morgan Partners.

 

In April this year Berry Plastics acquired all of the injection molding closure assets of Euromex Plastics from the SP Berner Plastic Group. Euromex is located in Toluca, Mexico. The terms of the transaction were not disclosed.